KEY POINTS:
Growers of green kiwifruit are likely to receive on average 2c more a tray and gold fruit growers 5c more than Zespri predicted in October and, while that's good news, the concern for the industry is how markets will perform next year.
Zespri's newly elected chief executive, Lain Jager, said the company was now focusing on the uncertainties of the 2009 season.
One of the characteristics of the current global financial situation was the extreme volatility of markets, so the reality was that the impact on food and, more specifically, fruit markets next season remained unclear, said Jager.
"In this situation the approach we have taken is to plan for both normal and downside scenarios and it will be about ensuring we have the flexibility to respond effectively to the market as we find it.
"We have seen a massive erosion of wealth in financial and housing markets globally and, combined with a sharp tightening of credit, this is leading to a sharp slowing of consumer spending."
Jager said a report by ANZ National economists Khoon Goh and Cameron Bagrie warned of tough times ahead. The European economy was in recession. Economic momentum across Asia was slowing. Global developments would dominate the economic outlook in 2009 as the full impact of the credit crisis fallout took effect.
Consumers would pare back spending and seek to build up savings in light of job insecurity, the report said.
However, Jager said the outlook was not all bad for New Zealand growers with a weaker dollar and lower oil prices supporting the kiwifruit industry's competitiveness.
"This is important following several disappointing seasons for growers from a profitability perspective. Zespri and post-harvest suppliers have made strong advances in supply chain performance over the last five years and it will be more important than ever that we work together in a truly integrated way to deliver the crop to market and optimise returns to growers."
Jager said the relative stability of Zespri's December forecast payments reflected very good market performance in the global financial context.
"This reflects the value of the single point of entry in challenging times."
The December forecast is slightly below the October forecast with total fruit and service payments, excluding the loyalty premium, decreasing from $778.2 million to $774.8 million.
This compares with $651.3 million in 2007/08. The decrease from the October forecast was predominantly due to higher-than-expected green onshore fruit loss. Volumes sold to the end of November were up 7.3 per cent or nearly 6.7 million trays on last year.
Zespri is the kiwifruit industry's only export company to all countries with the exception of Australia, although it does have marketing agreements other exporters.
- BAY OF PLENTY TIMES
