Kiwifruit: Zespri pleased with new licence auction system

Every year Zespri releases licences to grow kiwifruit in New Zealand. Photo / 123RF

RNZ

Top dollar continues to be paid for the right to grow gold kiwifruit here.

Each year Zespri releases licences to grow the fruit and this year it ran an ascending-price open auction rather than a bid tendering system.

The new licence release mechanism was established this year to provide greater price transparency which meant all growers paid the same price for a licence.

In another change, Zespri also ran two different auctions for the 350 hectares of Sungold on offer.

Two-hundred hectares were restricted to bidders wishing to convert existing Haywood green orchards over to Sungold.

It was feared green growers, who have been more cash strapped in recent years, might not have been able to compete in an open system for gold licence.

Zespri also wants to reduce the area of land planted in green kiwifruit and having a restricted auction would help the conversion process.

Of the 200 hectares available, 199.5 hectares were released at a price of $678,000 (inc GST) per hectare.

In the second unrestricted pool auction 148.8 hectares of the 150 hectares available were released at a price of $700,000 (inc GST) per hectare. This compares with last year’s median price of $921,150 (inc GST) and a minimum price of $519,740 (incl. GST) for SunGold Kiwifruit licence.

Chief grower, Industry and Sustainability officer Carol Ward said the level of interest in both licence release auctions reflects the strong market demand for SunGold Kiwifruit from customers and consumers.

“There is strong demand from growers either building new developments in gold kiwifruit or to transition from Haywood green variety to gold which has a higher yield, more productive and a great response up in the market,” she said.

Zespri also released 150 hectares of RubyRed kiwifruit under the open ascending-price auction.

A total of 125.8 hectares of the 150 hectares available was released at a price of $38,000 (inc GST) per hectare. The category was undersubscribed by 24.2 hectares.

Last year the median price for RubyRed was $147,000 per hectare.

Ward said there was some nervousness around growing RubyRed but consumers were really enjoying it.

“We’re continuing to see strong market demand. We’re learning rapidly how to grow it, it’s quite a smaller size on the vine, and it’s a little bit softer so you have to be particular in how to manage it on the orchard.

“We’re excited about the red category. We sit there with our green kiwifruit, our gold kiwifruit and red just complements our portfolio really really well,” she said.

Commenting about the new auction system Ward said Zespri was pleased with how it went.

“There was a good level of transparency overall. There are a few things we can do better but in the bigger picture of things it was a much better system and getting some positive feedback from growers on how it worked.”

The licence release results indicate that Zespri corporate revenue as a result of the licence released is estimated to be $212m (GST exclusive).

This compares to last year’s licence revenue of $307m (GST exclusive), which featured a larger release of RubyRed Kiwifruit hectares.

- RNZ