New Zealand diversifying exports
The last of the 15 million Gold trays are being packed. In general, the season is closing on a positive note. The Brix has developed slowly this year due to the high temperatures in May. Also, rains delayed the harvest. Zespri announced this year that it would increase the volume for the North American market. The turnover this season stands at $ 1.9 billion from 129 million trays of Zespri.
In early April, Zespri put 1.7 million boxes of kiwis on hold. Lubricants were found on some parts of the packaging and the company wanted to investigate whether this could have dangerous consequences for consumers. It was costly, but after weeks of tests, it was found that there were no health risks. The kiwis were then released again for their distribution in the market.
Zespri has great prospects for the 2016 season and has announced that it will expand with an additional 400 hectares of Sungold this year. In response to the rising global demand, this expansion will continue with another 400 new hectares of Sungold each year between 2017 and 2019. According to chairman Peter McBride, this expansion of the Sungold is an exciting decision for the industry. "This decision was taken because of the overwhelming global demand. In total, we will add 1,600 new hectares in the coming years and this will mean that more than $ 200 million in export revenue will be reached. Even before the decision was made to release the Sungold license, it was still on track to reach 1 billion in sales in 2017."
In 2000, Europe still accounted for half of the exports, followed by Japan with 21 percent. Today, that market share has fallen to 43 percent for Europe and 16 percent for Japan. In 2020, the demand from China and Asia will further shrink the market shares of Europe and Japan. By then, China will be taking over the second place from Japan, with an expected market share of 22 percent.
Seeka, the largest kiwi producer in New Zealand, tried to start exporting, but it was not granted permission by NZ Kiwifruit. A professional could offer no answer. Zespri has the export monopoly in its hands, to the chagrin of Seeka.
Italian season nearing its end
The final stage of the season is underway and is expected to finish in mid-June. For some companies, the campaign has already concluded. The stocks of Kiwi Gold have been depleted for some time.
This year's harvest was larger than last year, with smaller sizes and good quality. No problems were encountered with the trade and storage of the fruit. Until January, the prices were good; from February onwards, there was a greater volume available, partly because Greece came to the market. This pushed the prices down. Furthermore, the loss of the Russian market took a big toll, as that is where the smaller sizes were usually exported.
Hong Kong is an increasingly important export market. The containers take between 30 to 40 days to arrive. China is also becoming an attractive market for Italian kiwifruit, as the fruit there is considered to be of higher quality and safer. The market saw demand from Libya, Saudi Arabia and South and Central America. At this time, the market is stable, but there are fears for the next season, given that a lack of organisation in the supply could cause a surplus.
Greece taking a toll market
The combination of a good harvest and the closing of the Russian border turned Greece into a major competitor for Italy in the kiwifruit market. Due to the large volume available, prices were put under pressure. According to a trader, the season has been "one of the most difficult ever." This is due to the oversupply. Prices in Europe have been very low and by the end of the campaign are expected to drop even lower. Due to the large production, the calibres in Greece have been smaller.
French season a little longer
The French season lasted a little longer than usual this year, thus perfectly connecting with the Chilean import season. The fruit had a good shelf life, which helped extend the season a little longer. Now the French traders have smaller volumes available and Chilean exporters are coming into market. The first containers are expected next week.
Spain forced to export
The Spanish kiwi season in Galicia and Asturias, the two largest producing regions, is nearing its end. There has been a greater volume harvested this year than in the previous three seasons. The plantations have been recovering after the losses caused by Psa four years ago. This year, the sizes are smaller because of high winds in May and June. This has implications for the calibres in all European countries. The acreage has increased by 5 percent.
The lack of large sizes has made sales in Spain more difficult. Spanish consumers have a preference for big kiwis. Prices in the domestic market have fallen by about 50%. Because of the bad situation on the domestic market, traders have been forced to export the smaller sizes. The kiwis were shipped to destinations like Morocco, Canada and the United Kingdom.
Belgium receives first Zespri kiwifruit
The first shipment of Zespri Gold has arrived in Zeebrugge. The season started with just the Gold variety. Later in May, it will be followed by green kiwis, which arrive later because the harvest was delayed. The figures achieved by green kiwis will remain stable; production estimates are 77 million cases, of which 39 million will be shipped to Europe. The Sungold is increasing in volume worldwide and will reach 50 million boxes, of which 10 million are intended for Europe.
Israel: Demand exceeds supply
Kiwifruit is quite popular in Israel. Since its introduction a few decades ago, demand has been on the rise and there is now a small domestic production. With the combination of home-grown and imported, kiwis are available almost all year round. The import season starts in June with the kiwis from New Zealand, which remain on the market until October. Imported kiwifruit usually costs more, about 4 to 6 Euro per kilo. The Israeli market has a clear preference for green kiwifruit.
The harvest kicks off in October and the kiwis are available in the market until May. The acreage stands at 200 hectares, almost entirely in the northern Galilee. Every year, about 6,000 tonnes are harvested, mainly Hayward. There is also some Bruno. Prices for domestic kiwis range between 3 and 5.50 Euro per kilo.
In recent years, extreme weather conditions have taken a toll on the harvest; some producers have even stopped growing. As a result, there is usually more demand than supply.
Chile expects stable volume
The market situation is tough due to the large volume of Italian kiwifruit available. The harvest has been carried out without any issues. The Chilean volume is expected to be similar to that of the previous year, although a French importer foresees a small decline, of no more than two percent.
Argentina looking for export opportunities
The harvest started 15 days ago and is developing well. The domestic market is currently large, with a good demand; therefore, there are hardly any exports. Under the leadership of the new government, the country is looking for export opportunities. The first companies looking into this are considering exporting within the continent, but there are plans to look further.
Mexico: Sungold in Happy Meal
The first Zespri Sungold are expected in the third or fourth week. Last year, the Sungold was introduced at McDonald's. The kiwis were included in the Happy Meal. Expectations for this yellow kiwi in the Mexican market are good and prospects point to rising volumes. As regards green kiwifruit, there are some concerns about competition from Chile and Italy, which can offer the fruit at lower prices.
US market crowded
The large supply of Chilean and Italian kiwifruit is keeping prices low. In the coming weeks, New Zealand imports will also hit the market, so conditions are not as good as expected. On 23 May a box (9 kilos, loose, Hayward) from Chile costs between 12 and 14 US dollars in Philadelphia and Los Angeles. On the market there are many large sizes available. Given that New Zealand kiwifruit is often larger, further pressure on prices is expected. According to a trader, 75 percent of the kiwis on the market are larger than size 33.
Every week, FreshPlaza and AGF.nl publish an overview of the market situation of a product in a global context. With these articles we aim to provide a view of a global market shrinking due to globalisation. Next week, cherries will be in the spotlight.
