Producers of Southern Hemisphere kiwi

by Market Insider

Producers are now putting the last few seasons marked by the spread of Psa (Pseudomonas syringue pv. actinidiae) behind them. They know that for the moment there is no genuinely effective treatment for eradicating the disease, so they manage it pending new technical solutions. Nonetheless, the renewal is already in place, particularly in the yellow varieties, heavily affected by the bacterium, after the entire Hort 16 stock was uprooted in both New Zealand and Chile.
The 2013 season went smoothly but the Southern Hemisphere sources registered their lowest export level due to the invasion in the orchards of Psa, especially in New Zealand. Export volumes fell to 312.000 tons last year (-16% on 2012) as opposed to 392.000 tons in 2011.

There was a very marked downturn in yellow-flesh varieties: -57% out of New Zealand, i.e. just 37.900 tons in 2013, as opposed to 97.100 tons in 2011. Conversely, the potential of Hayward kiwis, considerably more resistant to the disease, was down by just 4% (273.400 tons) while volumes of the variety out of Chile fell less, with 213.000 tons exported in 2013 (-2% on 2012). Europe remains by far the main destination for both sources, with a total of 214.000 tons. Imports from New Zealand fell by only 11% from 2013; on other hand, they were down by 45% to the USA and by 54% to Russia even though the imports level has been partly compensated by Chile.

This source is consolidating its market share to these destinations (+12% to the USA and +18% to Russia) though Chilean exporters had to apply trade-offs by limiting export shipments to Latin American and Asian countries. However, both sources are continuing to expand in the Middle East (+10% for New Zealand and + 5% for Chile) which now represents an outlet of 10.000 tons.

New Zealand production was heavily affected by Psa which appeared in the country in 2010. The spread of the disease was very quick. It had affected 69% of orchards in 2012 and has now reached 80% of the surface area (11.156 ha as of 10 April 2014). However the fall in potential was reduced overall thanks to the resistance of the Hayward variety (green-flesh kiwi) as well the responsiveness of the New Zealand industry, which took preventive measures early, initiating the uprooting and top-grafting of Hort 16 plants (Zespri Gold), particularly sensitive to Pseudomonas. Hence the 2.600 ha of Zespri Gold were rapidly grafted, in particular the new Zespri Sungold (G3) variety, which should help restore the initial potential very quickly. It could even reach 85 million boxes this year, i.e. a slightly lower level than the year before Psa, when the tonnage was flirting with the 100 million box mark.

Yet, there should be a significant increase for Gold, to approach 16 million boxes, as opposed to 11 million last year. So the yellow variety potential should rapidly start growing again to satisfy the many demanding markets in Europe and especially in Asia. Indeed Zespri is forecasting a potential of 50 million boxes by 2018 having authorized last year additional licences for 1.130 ha, expanding the total Sun Gold plantations to 4.000 ha. Nonetheless, producers know that they will not get rid of the disease in the short term but have learned to live with it and are managing the symptoms meticulously, which helps recovering yields comparable to those before Psa. New varieties are still under trial, in particular a green variety and a red-flesh variety, though they will still need to demonstrate their performance in terms of logistics and resistance to Psa.

Similarly, Psa has heavily affected Hort 16 production in Chile destroying the entire stock and rapidly spreading, especially in the South of the country where the colder and wetter climate has boosted its dispersion. Strict measures have been taken since the first diagnostic in 2011, particularly at the orchard entrances (information, boot washes, hand disinfection, exclusivity of equipment used in affected zones), to limit the spread of the disease. However, the latest report published by the Kiwi Committee revealed a very rapid spread in the zones concerned (primarily in the Maule province, which produces 50% of the potential, and Bio-Bio province though this represents no more than 5% of the potential), fairly similar to that recorded in New Zealand. Hence while only six orchards were infected in the Maule region (region Vll) in 2011, 82% of the surface areas had been infected by 2013.

Nonetheless, not all the production zones are affected at the moment. No authenticated cases have yet been described in zone V, in which 37% of the potential is packed. Furthermore, the Chilean Kiwi Committee unveiled a new early detection system for Psa, developed by the Foundation for Agricultural Innovation (FIA) in collaboration with the Committee, which should help producers better identify the development conditions of the disease, in order to apply the appropriate preventive measures very early on. The impact on production was previously limited with the Hayward variety still forming 84% of the surface area in 2013 though it fell slightly due to the uprooting (11.086 ha in 2013, i.e. -7% from 2012) but also because of the low yields. Psa has also slowed the diversification of the stock though without completely stopping it. It is now based primarily on the Jintao (1.000 ha) and Kiss varieties (less than 200 ha).

The 2014 season should be marked above all by the heavy shortfall affecting Chile this year. Indeed, production was decimated by the intense cold spell of September, which greatly affected flowering. Also, according to the latest estimates of the Chilean Kiwi Commission, the volumes available for export should not exceed 100.000 tons, as opposed to 215.000 tons last year, with a medium or even small size profile.

So Chilean operators have prioritized the US market, waiting for the end of the European season to earn value from their produce and stagger their season. However, this finished early, enabling the European season to start in May at price levels rarely reached (2.40 Euros/kg, French import prices). Conversely, New Zealand production should exhibit a good level, with the yellow-flesh kiwi back to a significant potential. The first ship bound for Zeebrugge was received in week 20, and no fewer than 20 ships should come into the Belgian port throughout week 32. However, the very start of the season was a bit sluggish.

The season should nonetheless quickly get going, helped by a big promotional campaign orchestrated by Zespri to position the new SunGold variety. TV adverts have been scheduled, as well as activities in store and at the big wholesale markets from June. For their part, Chilean operators have strengthened their links with their Italian counterparts by signing an agreement between Kiwi Fruit of Italy and the Chilean Kiwifruit Committee at Fruit Logistica, in order to consolidate the foreign markets and provide promotional support to the operators.