Zespri forecasts higher tray returns

Wednesday 18th August 2010

Zespri International is forecasting higher per-tray returns for growers on the back of supply-side pressures.

Total fruit and service payments to growers for the next year are expected to come in at $856.2 million, up $22.3 million, or 2.7%, on the previous period, the company said in a statement today.

This translates to an average increase of 27 cents per tray, or 3.2%, to $8.44.

Zespri said patchy pollination and a very dry New Zealand summer resulted in lower-than-expected yields and a larger quantity of smaller fruit earlier in the season.

"While the average per-tray return in all pools has increased, it's important to note that in a high taste year, some growers with smaller fruit and lower dry matter levels, or with lower yields, may actually have reduced returns per hectare," said Zespri CEO Lain Jager.

‘High taste' fruit typically is the result of dry weather and smaller fruit that concentrates the flavour. Of the three categories of kiwifruit sold by the company, Zespri Green yields are expected to increase the most, up 5% to $7.35 per tray.

Zespri Gold is expected to increase 2.8% to $12.47 per tray, and Zespri Green Organic is expected to increase 0.2% to $8.98 per tray.

The company said improvements in Green yields would be heartening for growers whose returns have been under significant pressure in recent years following strong volume growth, a deteriorating marketing mix and rising costs.

Jager noted that while some markets are recovering from the recession faster than others, overall demand had stabilised and growing across all categories.

The company is embroiled in a legal tussle with listed company Turners & Growers, after the Guinness Peat Group subsidiary turned to the High Court in an attempt to break Zespri's dominant and protected export status.

Businesswire.co.nz

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