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Friday 03 December 2021

Zespri slashes 2022 SunGold licences

21st October 2021 By Staff Reporter | | @foodtickernz

Zespri has halved the quantity of SunGold licences it plans to release in 2022 as it looks to keep supply and demand in check and buy some breathing space as Covid-19 challenges peak over the summer season.

The kiwifruit marketer and exporter said the quantity of SunGold Kiwifruit licence – a strong earner for the co-operative – to be released in 2022 has been reduced from 700 hectares to 350 hectares.

In a statement released after a meeting of Zepsri’s board, chairman Bruce Cameron said the decision was based around ensuring sustainable value for growers, through management of supply volumes aligned with projected future market demand.

He added that an interim slowdown in licence release bought it some time to react to a range of challenges such as labour shortages, primarily driven by Covid-19.

“Supply volumes are increasing with growers achieving strong yields per hectare, and with a continued focus on delivering fruit of high quality to our markets,” Cameron said.

“Concurrently, we are confronted by a range of challenges, primarily driven by Covid-19 which continues to have an impact across our value and supply chain. An interim slowdown in licence release allows us to address this while ensuring we have some time to watch the rapidly evolving Covid-19 situation unfold, including the reopening of New Zealand to the world and changes to immigration settings.”

Zespri added that the industry was considering a range of operational changes aimed at countering the significant labour shortage expected in 2022.

It also confirmed it will not release any Organic SunGold Kiwifruit licences for the 2022 season, as it said there was enough supply via recent orchard conversions to organic to meet projected growth in demand. It would review the decision annually.

Despite the short-term measure, Zespri said it remained “incredibly confident in the market demand outlook”.

It indicated that SunGold Kiwifruit licence release during 2023 – 2026 was in the range of 350 – 700 hectares per annum, subject to annual review.

In September, Zespri said labour shortages, increased kiwifruit supply, and shipping disruptions were leading to one of the most challenging seasons in decades.

It estimated the labour shortfall could reach 23% of required workers in summer 2022-23.

The kiwifruit co-op delivered record results for the 2020-21 season partly fulled by the ongoing expansion of its SunGold production.

Total global revenue generated by fruit sales reached $3.58bn, up 14% on the previous year, while total global operating revenue jumped 16% to $3.89bn.

Global sales volumes were up 10% on the previous year to 181.5 million trays, contributing to the rise in profit after tax from $200.8m to $290.5m.

The average return for Zespri SunGold Kiwifruit increased to $12.46 per tray, and the average return per hectare was a record $177,846. This compared with the average return for Zespri Green per tray, which increased to $7.51 per tray, with the average return per hectare reaching $76,722.



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