KEY POINTS:
Kiwifruit growers can still confidently budget for at least a 10 per cent increase in revenue after the latest selling season of more than 100 million trays.
Zespri Group chairman Craig Greenlees reassured growers at the annual meeting in Tauranga yesterday that they would receive an improved return
this year - taking green kiwifruit growers, who produce 75 per cent of the total crop, above the break-even mark.
In May, Zespri announced an indicative range of $6.75 to $7.15 a tray for green kiwifruit in the year ending March 2009, compared with an actual return of $6.30 a tray in 2007/08.
Zespri executives are expecting the return to settle at $6.95c a tray - a 65c improvement.
Greenlees said although it was still relatively early days, "we remain confident that we can deliver returns towards the midpoint of these ranges, even with further negative impacts from fuel prices over the past six weeks".
It would be the highest return for four years - and last year many green kiwifruit growers, saddled with rising costs and a strong dollar, lost money.
Greenlees said the bigger return would result from an improvement in the exchange rate, continuing high volume and premium prices, increased size of green kiwifruit and reduced onshore fruit loss.
He said Zespri has been able to increase its European prices twice this season - first before the end of May and the second by the end of June.
"In Europe this year, we saw an opportunity for an early and strong start to displace what would be a later and smaller profile crop from Chile," said Greenlees.
"The biggest Chilean shipping weeks were timed to coincide with our early arrivals, and it was critical to our sales strategy that we secured customers and shelf space from the beginning."
He said Zespri's prices in Europe were at present higher than last year and, size for size, this was a 40 to 70 per cent premium above current Chilean prices.
Zespri has sold four million, or 37 per cent, more green kiwifruit trays in Europe at this stage in the selling season compared with last year.
Greenlees said he was conscious that growers felt the pain of reduced returns in the past year - and to help reduce that pain Zespri would again pay out 100 per cent of available profits and increased the loyalty payment from 7c to 10c a tray.
Zespri is generating extra revenue out of the Japanese and European markets, and Greenlees said China was presenting an exciting opportunity.
"The signing of the Free Trade Agreement with a reduction in our 20 per cent tariff over the next nine years improves future revenue opportunities from the Chinese market," he said.
Zespri is looking at shipping fruit straight off the local orchards in bins to be packed in China. Lain Jager, acting chief executive of Zespri, told the growers and shareholders that "depending on trial results, we expect to carry out a commercial scale trial next year".
Greenlees and Pilkington were re- elected to the Zespri board, while Mark Bayly became a new director to replace Graham Drury who retired. All three directors were unopposed.
