New Zealand's Kiwifruit Industry Faces New Challenges Due to Warm Winter
New Zealand's kiwifruit industry faces new challenges due to a warm winter. This situation has raised concerns among growers in the Bay of Plenty, the central kiwi-growing region in the country. The higher temperatures experienced during the winter have resulted in insufficient winter chilling hours for the kiwifruit vines, directly impacting the flowering and fruiting process. The impact of the warm winter on the kiwifruit industry is further reflected in the projected harvest for the 2023 season. Data from Zespri, a major kiwifruit exporter, indicate that the harvest volume is expected to be significantly lower compared to previous years. The estimated export volume for the 2023 season is 136 million trays, representing a 20.5% year-over-year (YoY) decrease compared to the 171 million trays recorded in the previous one for Zespri in New Zealand.
According to records from the National Institute of Water and Atmospheric Research, on average, New Zealand's temperatures in June were 1.4 degrees Celsius higher than usual, making it one of the warmest winters in the past 110 years. This warm winter has disrupted the natural growth cycle of kiwifruit, as the vines require a certain number of chilling hours to stimulate flower set and fruit development. The lack of winter chilling has delayed kiwifruit flowering, resulting in fewer flowers on the vines. This ultimately affects the overall yield of the crop. To compensate for the reduced flower production, growers have intentionally retained more winter buds. Kiwifruit plants are typically pruned as a standard horticultural practice to promote healthy growth, manage the plant's structure, and optimize fruit production. Pruning helps redirect the plant's energy towards fruit-bearing branches, resulting in larger and higher-quality fruits. Removing excess growth also allows the plant to allocate resources more effectively to fruit development. However, this strategy may hurt fruit quality.
Source: TradeMap and Tridge
The European Union (EU) was the lead market for New Zealand traders in Q2-23. However, it recorded a significant fall of 32.88% YoY, to 98,166 metric tons (mt), mainly due to intense competition from Greece and Italy, which Tridge covered in May-Greek Kiwifruit Trade Continues Its Success Streak and Is Still Expanding in 2023. Two other significant markets, China and Japan, also recorded a decrease in volume, albeit not as substantial as the EU’s, with a 3.05% and 14.56% YoY drop. Despite a slight increase in Q1, Q2 is the primary export season for New Zealand kiwifruit, and volume in the top 5 markets recorded negative growth. Tridge also predicted this point in Feb-23.
Despite current difficulties, there is optimism for the future. The EU tariff of 8 to 8.8% is one of the higher single tariffs for exports to the EU, accounting for 91% of duties for 27.5% of the FOB value in 2022. Tariffs on kiwifruit exports to the EU will be phased down in 2024 when the New Zealand-EU FTA is due to enter into force. Zespri and other industry stakeholders are committed to regaining momentum and enhancing returns for growers and the kiwifruit sector. The industry's Quality Action Plan has effectively reduced quality costs and ensured the quality of exported fruit. New Zealand traders will focus more on quality and reaching higher prices than volumes in the upcoming period. Tridge expects a consecutive decline in New Zealand kiwifruit volume.