That growth was largely coming on the back of a push to sell fruit in Asia with the development of trademark “club” apple varieties that have eating qualities designed specifically for those markets, the bank said in its latest Agri Focus newsletter.
A third of NZ’s pip fruit crop was planted in those targeted varieties, which include Fuji, Pacific Queen, Pacific Rose and Pacific Beauty.
“This combined with NZ’s focus on higher quality standards and ability to meet strict phyto-sanitary measures has created brand presence and exclusivity, delivering significant price premiums.”
The bank forecasts that by 2020, NZ could be exporting 600,000 tonnes of fruit worth $1 billion, a 25% gain on present export volumes.
Sector earnings from export and domestic sales are about $700 million with production about 500,000t.
This optimism comes on the back of what it termed “a purple patch” for the industry, following three profitable harvests which were counter to previous trends of peaks and troughs.
Improved returns since 2012 had generated cash operating surpluses on orchards of more than $14,000 a hectare and cash rates of return of more than 15%.
In addition to the new varieties and targeting Asia, the bank said the sector was benefiting from a vertically integrated structure following deregulation, best management practices throughout the supply chain, superior production systems, new orchard design and management, an ability to consistently deliver superior quality fruit and the seasonal employer scheme.
Since deregulation, the report noted, those changes meant better control of the supply of fruit resulting in better quality standards and trees were producing more fruit.
NZ growers led the world in yield at more than 60t a ha with Chile second at close to 50t a ha.
“The yield performance not only reflects NZ’s natural climatic advantages but also the industry’s more scientific approach to achieving best practice in all areas of orchard design and management.”
While traditional markets continued to offer opportunities, the greatest growth potential was Asia, which took 41% of NZ exports last year and Australia.
It noted that increasing consumption of 0.75kg a head in non-pip fruit producing countries Thailand, Indonesia, Philippines and Malaysia would consume all NZ’s apple crop.
NZ exporters had shorter shipping times to Asia than Chile and it cost less, $4.28 a TCE, or 18kg tray equivalent, compared to $10.70 TCE to ship the same tray to the United Kingdom.
NZ’s pip fruit sector has become so competitive the bank report stated it could handle the numerous challenges it faced.
These included competition from China and Chile, the power of retailers, biosecurity risks, non-tariff barriers, and issues securing sufficient seasonal labour and root stock.
The industry is largely concentrated on two regions, Hawke’s Bay and Nelson which account for 91% of apple production. Twenty years ago those areas contributed 62% of production.
Hawke’s Bay fruit was weighted towards varieties favoured in Asia, Fuji, the Pacific series and Royal Gala. With an early harvest, the fruit was in Asian stores before those of competitors.
Nelson orchards were weighted towards Jazz and Braeburn varieties, favoured by European consumers.
NZ accounts for 0.4% of global apple production and 3% to 4% of traded fruit, making it one of the world’s top 10 exporters.
China is the largest exporter followed by Poland, Italy, United States, Chile, France and South Africa and then NZ.
