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17 December 2003
Returns to apple growers are expected to fall in 2003/04 for the second
successive year but then gradually rise over the medium term as the New Zealand
dollar depreciates, according to the latest MAF Situation and Outlook for New
Zealand Agriculture and Forestry (SONZAF) report.
However the SONZAF report says this fall in export carton returns could be
offset this year by increased production.
The report says that despite improved market prices in the past three years,
grower returns for the year ended September 2003 fell because of the higher
value of the New Zealand dollar.
Apple growers received an estimated $12.60 per export carton at the orchard
gate. This was down 12 percent on the previous season.
Severe spring frosts in Hawkes Bay and hail in Nelson along with cooler drier
conditions in the country reduced the total production of apples by six percent
compared to the previous year.
Despite this, total apple exports increased marginally to 17.9-million
cartons. This resulted in a reduction of apples for juice and some processors
struggled to source apples.
Looking to the current season, there are encouraging signs that the apple
harvest season will be good.
In recent years there has been a big drop in the number of apple growers in
the country - down from around 1500 to fewer than 900.
However, New Zealand's apple production is forecast to continue to increase
in future due to orchard expansion, new development and increased production.
The report says New Zealand's apple export volumes for the 2003/04 season are
forecast to increase by seven percent to 19.2-million cartons. Further on,
provided that there are no long-term adverse climatic events, export volumes are
due to steadily increase to 19.6-million cartons by 2006/07.
Since the industry was deregulated in 2001, the number apple exporters have
increased to 97. Thirty-five exporters were responsible for 95 percent of
exports, with ENZA alone exporting 41 percent of the total export volume last
This fragmentation of the export market is leading to concerns about
"weak selling", to the benefit of big overseas retailers. There have
also been suggestions that the industry could benefit from more co-operation,
particularly in "common-good" areas such as crop estimation and price
A MAF review of the effect of industry reforms is due to be completed early
In the longer term, the report says that the New Zealand pipfruit industry is
at a cross roads.
It says there is a danger that relaxed grade standards, combined with an
increased world supply of Braeburn and Royal Gala apples, and the large number
of New Zealand exporters, could erode the premiums that New Zealand currently
receives for its apples.
For more information contact:
Duane Redward, MAF Policy Analyst, Tel. 06-870-6304 or go to website http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/sonzaf/index.htm