High dollar nibbles at kiwifruit returns

Kiwifruit growers are facing a lower return on the green variety for the second year running - but the situation is looking brighter for the gold and organic fruit.

Zespri International chairman Craig Greenlees told shareholders at the annual meeting in Tauranga that the company is facing another daunting selling season this year.

The New Zealand dollar was eating away at returns even before selling of the bumper crop had started.

Zespri expects to lose around $50 million in earnings on the foreign exchange, and this was equivalent to a fall of 60c a tray for green kiwifruit and $1 for gold and organic.

Zespri is sending a record 84 million trays of kiwifruit overseas - three million more than last year.

Because of a later start to the selling season, Zespri missed the opportunity of moving 2.7 million trays of early green kiwifruit in Europe.

At this stage the major exporter has five million more trays of green to sell around the world than last year. Greenlees was confident the extra volume would be moved but he was uncertain whether these sales would be at the premium price. Zespri will next month make a forecast of its end-of-season returns.

But after the meeting, Greenlees said the return for the green variety was likely to be less than last year.

"We were hoping to recover the 60c [per tray] deficit but the extra five million in volume makes it harder to do better."

Greenlees said improved access to the Japanese market meant sales there were already 50 per cent more than last year. Sales in Taiwan and Korea were also up.

Supplies of gold kiwifruit to the main European market were slightly down but prices had increased. There was increased gold and organic demand and "we are confident of recovering some of the $1 per tray deficit".

In the 2004-05 year, growers received $4.32 a tray for green (compared with $6.35 the previous year), $6.05 for organic, with gold at $5.50. On top of this was a 10c-a-tray loyalty payment for class one kiwifruit.

Greenlees told the meeting that Zespri was looking at increasing the grower rebate to around 18c a tray, from the present 10c - representing a payout of $14 million based on present levels of performance.

Zespri has also offered to buy back shares, at $4.10 each, to create a better shareholding balance between production and company ownership.

- NZPA