For fresh produce marketing in Australia and New Zealand
Mike Knowles



Friday 28th August 2009, 20:08 Melbourne

Zespri makes first payment forecast

Kiwifruit marketer to grow demand and introduce new cultivars as pressure on Green market continues to be felt

Zespri makes first payment forecast

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In its first payment forecast of the season, Zespri has told its growers that fruit and service payments across all pools are projected to increase NZ$25.7m compared with last season to NZ$804.7m.

According to the company, reduced costs particularly for fuel and improved foreign exchange movements have contributed to the increase and offset the impacts on pricing being felt particularly by the Green and Green Organics categories, due to challenging trading conditions in the fresh fruit market.

Commenting on the forecast, Zespri's chief executive officer Lain Jager said it was important to look beyond the increase in total fruit and service payments because the story was "very different" for each category.

Whereas a 10 cent fall in the per-tray forecast for Zespri Green was more or less in line with last year, anticipated payments the group's Organic kiwifruit was set to be down 46 cents.

"Once we take into account increased post-harvest and other costs, and a lower
Green yield, it’s another tough year for Green growers," Mr Jager added. "On one hand, this is a very good result in the context of a challenging fruit market. On the
other hand, I think we all recognise that the Green return is not where it needs to be."

The Green market is also not getting any easier, he added. "But there is a viable business into the future. We are strongly focused on driving value back into this
business over the next five years and the answer lies in our ability to continue to grow Green demand strongly while rapidly evolving the product mix."

Changing the mix, Mr Jager insisted, would take the supply pressure off Green. "This includes increasing Gold volumes and introducing new cultivars to complement our existing product portfolio."

With Gold volumes expected to be slightly less than last season, demand is high and forecast returns are strong. Positive contributions from pricing, foreign exchange and a reduction in costs have contributed to a NZ$1.97 per-tray increase.

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