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6.1     Kiwifruit

6.1.1      Kiwifruit industry profile

New Zealand’s 2,681 kiwifruit growers produce approximately 149 million trays for export from 12,692 productive hectares. The Bay of Plenty is the focus of kiwifruit growing (principally Katikati, Te Puke, Tauranga and Opotiki) producing over 80% of the crop.

The value of New Zealand kiwifruit export earnings in 2017/18 was $1.859 billion, which was 12% up on 2016/17.

The New Zealand kiwifruit industry continues to recover from the devastating effects of a bacterial canker disease specific to kiwifruit, Pseudomonas syringae pv. actinidiae (termed Psa). Psa was detected in New Zealand in November 2010 and rapidly caused widespread and severe impacts to NZ's kiwifruit industry. Psa is also present in a number of countries including Italy, Japan, South Korea, Chile, and most recently Australia. There is no current cure for the disease.

The New Zealand kiwifruit industry’s dominant ‘Hayward’ variety (‘green’ kiwifruit) is relatively tolerant to the disease and new varieties are being progressed (FreshFacts 2013).

More than 4,600 hectares of the new gold kiwifruit cultivar, commonly known as Gold3, have now been licensed in New Zealand with more than 60 million trays produced in 2018. The new cultivar was fast-tracked through commercial launch in response to the identification of Psa in 2010 and is a cornerstone in the Psa recovery pathway and the major driver of the kiwifruit industry’s expansion. SunGold’s market performance has been very strong and as a result Zespri has released an additional 400 hectares of licence in 2016, 400 hectares in 2017 and 750 hectares in 2018.

The industry-funded entity, Kiwifruit Vine Health (KVH), leads the New Zealand recovery from Psa. This includes a comprehensive research and development programme involving researchers from New Zealand and around the world, working to develop strategies to combat the disease. KVH is also tasked with leading wider biosecurity for the kiwifruit industry. Its vision is “to achieve a high health status of kiwifruit vines, to enable a thriving and profitable New Zealand kiwifruit industry”. The key focus areas in support of this vision are: advocacy, promoting best practice biosecurity to growers, providing technical advice, removing wild kiwifruit and abandoned orchards, profiling new and emerging risks and managing industry preparedness and response.

 

Table 6.1.1: Kiwifruit industry statistics

Season (to 31 March)

2009

2010

2011

2012

2013

2014

2015

2016

 

2017

 

2018

Trays submitted (million)

109.4

107

105.9

119.5

105.7

97.69

97.8

123.4

148.9

124.4

Trays sold (million)

100

98.6

98.1

109.1

101.3

95.1

95.2

117.0

137.7

123.2

Yield (trays/ha)

8.866

8,546

8,255

9556

8621

8,684

8,076

10,157

11,838

9579

Planting (ha)

12,337

12,525

12,825

12500

12263

11,250

11,233

12,185

12,578

12,692

Growers

2,710

2,711

2,706

2662

2636

2,556

2,540

2,516

2,435

2,681

Packhouses

71

71

67

63

59

54

50

51

50

56

Coolstores

92

77

83

79

76

68

62

64

73

67

As a result of the Kiwifruit Industry restructuring Act 1999, Zespri Group Ltd is a single desk exporter of kiwifruit to countries other than Australia. Zespri Group Ltd (Chief Executive – Dan Mathieson, www.Zespri.com) is a private company, employing around 600 people and owned by current and past New Zealand kiwifruit growers.

Kiwifruit exported to Australia are a prescribed product under the New Zealand Horticulture Export Authority Act (NZKPGA Product Group Manager – Terry Richards), and the 12 HEA-licenced exporters to Australia are represented by Kiwifruit Exporters To Australia (KETA, www.keta.co.nz). Kiwifruit can be exported to countries other than Australia in collaboration with Zespri by applying to the industry regulator, Kiwifruit New Zealand, for a collaborative marketing programme. In 2017/18 there were 13 companies operating 36 collaborative marketing sales programmes with Zespri, exporting just over 2.3 million trays of kiwifruit from New Zealand to markets other than Australia.

The interests of growers are represented by New Zealand Kiwifruit Growers Incorporated (Chief Executive – Nikki Johnson, www.nzkgi.org.nz). NZKGI’s vision is to be a strong grower advocacy organisation that leads growers and engages with industry partners.  It has a mission to advocate, protect and enhance the commercial and political interests of NZ kiwifruit growers. NZKGI activities are led through strategic objectives in the areas of Labour & Education, External Relations, Industry Stability, Performance and Organisational Management.

New Zealand kiwifruit and kiwiberry is exported under the following four HS Codes (refer Chapter 7):

  • 0810.50.00.10: kiwifruit, gold fleshed, fresh
  • 0810.50.00.19: kiwifruit, green fleshed, fresh
  • 0810.50.00.29: kiwifruit, other than gold or green fleshed, fresh
  • 0810.90.00.55: kiwiberry

 6.1.2  Kiwifruit exports

Kiwifruit continues to be New Zealand’s largest single horticultural export by volume and value with exports exceeding $1.8 billion in 2018. This represents an 11% increase in value over 2016, while volumes have only increased by 1% over this time period, indicating that kiwifruit are earning a significantly higher return per tonne than they did in 2016.

The European Union, China and Japan take 27.5%, 24.6% and 21.3% of all kiwifruit exported respectively by value. Exports to these markets increased by 18%, 23% and 2% respectively since 2016. The per tonne average value of kiwifruit exports to each of these markets increased by 15.7%, 13.6% and 9.8% with exports to China now achieving a higher per tonne value ($4,506) than any other market with the exception of Singapore ($5,116).

Table 6.1.2: Kiwifruit (0810.50.00) export markets 2016-18(year ending June, tonnes and $NZ FOB)

Market

2016

2017

2018

Volume

Value

Volume

Value

Volume

Value

European Union

200,317

433,219,812

195,071

419,752,840

204,370

511,287,055

China

93,646

371,369,466

97,611

364,843,246

101,457

457,159,330

Japan

103,839

390,229,542

95,359

381,454,583

96,122

396,703,399

Taiwan

39,570

154,124,390

37,781

144,676,106

35,360

137,711,850

Korea, Republic of

21,816

56,316,782

30,034

86,045,079

28,196

91,591,502

United States of America

19,046

58,984,858

19,158

59,876,730

22,119

65,637,899

Australia

17,549

41,736,216

17,802

40,461,036

16,043

42,383,802

Hong Kong

7,898

35,205,294

6,841

29,313,601

6,559

29,129,510

India

4,886

13,378,656

10,114

18,078,842

7,380

16,139,068

Singapore

3,588

14,630,687

3,606

15,823,400

3,033

15,517,921

Canada

4,403

11,546,642

5,039

12,839,847

4,959

14,196,861

Vietnam

2,278

8,808,704

3,090

11,425,459

3,240

12,651,264

Malaysia

4,909

16,467,863

5,102

16,100,194

2,965

10,543,035

Indonesia

3,681

12,809,965

3,197

11,072,114

2,691

9,943,090

Brazil

2,482

6,737,262

2,857

6,713,132

2,974

7,555,171

Thailand

2,759

8,931,780

3,130

9,242,180

2,267

7,209,883

United Arab Emirates

2,442

7,633,768

2,132

6,433,906

1,969

6,487,963

Mexico

1,003

2,964,982

2,368

5,664,930

1,848

4,689,192

Saudi Arabia

988

3,075,458

1,366

3,936,322

1,186

3,792,932

South Africa

1,442

3,321,711

1,636

3,122,285

1,576

3,131,751

Philippines

1,098

2,971,330

1,061

2,700,888

1,078

2,904,294

Israel

731

1,957,427

976

2,678,624

891

2,774,632

Kuwait

851

2,728,250

714

2,187,434

592

2,004,743

Russia

927

2,229,212

934

2,134,987

742

1,937,696

Mauritius

542

1,433,407

548

1,364,843

378

1,041,009

Bahrain

347

1,111,416

336

1,028,152

284

949,083

Reunion

310

784,858

406

995,914

329

907,798

New Caledonia

208

594,898

287

772,794

302

764,022

French Polynesia

186

593,434

154

500,320

199

707,525

Costa Rica

212

630,155

171

472,452

158

416,828

Argentina

49

104,442

146

308,069

98

229,348

Myanmar

10

40,444

71

245,982

64

220,364

Fiji

47

128,161

100

226,963

69

198,693

El Salvador

136

397,425

112

300,222

77

188,569

Guatemala

68

201,727

113

308,373

68

178,814

Pacific Islands

18

57,081

27

75,180

22

69,948

Papua New Guinea

4

10,021

4

11,425

1

3,232

Qatar

256

780,097

161

459,098

0

0

Lebanon

236

643,245

117

266,783

0

0

Maldives

0

0

0

5

0

0

Cambodia

17

58,564

0

0

0

0

Total

544,795

$1,668,949,432

549,732

$1,663,914,340

551,666

$1,858,959,076

% change (Yr/Yr)

19%

41%

1%

0%

0%

12%

Source: Statistics New Zealand

 

NZ KiwiBerry Growers Inc. is the industry body that represents kiwiberries. Exports of kiwiberries are regulated under the Kiwifruit Export Regulations and the HEA (for Australia).

Table 6.1.3: Kiwiberry (0810.90.00.55) export markets 2016-18 (year ending June, tonnes and $NZ FOB)

Market

2016

2017

2018

Volume

Value

Volume

Value

Volume

Value

Australia

96

1,385,389

98

1,230,376

116

1,627,279

Taiwan

57

948,753

56

894,458

59

835,526

United States of America

31

394,612

47

658,975

53

651,030

Japan

9

153,729

3

45,525

26

405,011

Hong Kong

20

340,192

48

773,012

28

355,214

Singapore

10

154,223

6

87,883

8

104,740

Thailand

2

35,544

1

16,173

4

57,922

Malaysia

3

46,685

3

45,588

4

56,574

India

0

0

0

0

3

49,055

European Union

1

17,131

4

75,085

2

35,151

Indonesia

1

17,264

1

19,562

1

16,555

United Arab Emirates

0

0

1

14,626

1

16,418

Canada

0.5

8,831

0.5

5,839

1

14,505

French Polynesia

0

414

0

178

0.1

953

Vietnam

5

45,117

1

13,290

0

0

China

27

523,941

0

0

0

0

Korea

3

53,035

0

0

0

0

Pacific Islands

0

51

0

0

0

0

Total

264

$4,124,911

269

$3,880,570

305

$4,225,933

% change (Yr/Yr)

4%

12%

2%

-6%

14%

9%

Source: Statistics New Zealand

 

6.1.3  Barriers to kiwifruit exports

Cost of tariffs in leading markets

Significant tariffs exist in several major kiwifruit export markets including Korea where the 15% tariff resulted in costs of $13.7 million in 2018. Kiwifruit exports to Korea represent 4.9% ($92m of $1.858 billion exported) of New Zealand's export value but 16% ($13.7m of the $85m in tariffs) of total tariffs paid. This tariff is being phased out to zero in 2020. The European Union tariff of 8-8.8% resulted in costs of $34.7 million; Chile, in contrast, pays no tariff on kiwifruit exported to the EU. Japan's 6.4% tariff was $25 million in 2018. The $85.1 million estimated cost of tariffs in 2018 equates to $31,753 per kiwifruit grower.

Table 6.1.4: Cost of kiwifruit tariffs (based on 2018 FOB value)

Country

Tariff rate

Value of exports (NZ$ FOB)

Estimated cost of tariff ($)

European Union

8-8.8%

511,287,055

40,902,964

China

0%

457,159,330

0

Japan

6.4%

396,703,399

25,389,018

Taiwan

0%

137,711,850

0

Korea, Republic of

15%

91,591,502

13,738,725

United States of America

0%

65,637,899

0

Australia

0%

42,383,802

0

Hong Kong

0%

29,129,510

0

India

30%

16,139,068

4,841,720

Singapore

0%

15,517,921

0

Canada

0%

14,196,861

0

Vietnam

0%

12,651,264

0

Malaysia

0%

10,543,035

0

Indonesia

0%

9,943,090

0

Thailand

0%

7,209,883

0

United Arab Emirates

0%

6,487,963

0

Mexico

0%

4,689,192

0

Philippines

0%

2,904,294

0

Kuwait

0%

2,004,743

0

Russia

0%

1,937,696

0

New Caledonia

25%

764,022

191,006

French Polynesia

8%

707,525

56,602

Fiji

5%

198,693

9,935

Total

4.6%

$1,837,300,904

$85,129,970

Under the CPTPP, the 6.4% tariff into Japan will be eliminated on entry into force on 30 December 2018. Based on the above trade profile, this will eliminate almost 30% of the total annual tariff cost for the NZ kiwifruit export sector. A free trade agreement negotiation with India commenced in 2010 however the timeframe for completion of these negotiations is not clear. Under the New Zealand-China Free Trade Agreement the kiwifruit tariff has been zero since 2016

Chile is a competing Southern Hemisphere supplier and has negotiated free trade agreements with 12 countries including China, Korea, Japan, the USA, Mexico, MERCOSUR countries (Brazil, Argentina, Paraguay, and Uruguay), and the European Union. There are concerns that the trade advantage enjoyed by Chile will reduce prices in these markets and make it more difficult for New Zealand to compete.

European Union – The tariff on kiwifruit (8-8.8%) is one of the higher single tariffs for New Zealand exports to the EU, costing just under $41 million in 2018 (based on FOB value, or $65m based on CIF).

 

Table 6.1.5: Cost of kiwiberry tariffs (based on 2018 FOB value)

Country

Tariff rate

Value of exports (NZ$ FOB)

Estimated cost of tariff ($)

Australia

0%

1,627,279

0

Taiwan

11.3%

835,526

94,414

United States of America

2%

651,030

14,323

Japan

6%

405,011

24,301

Hong Kong

0%

355,214

0

Singapore

0%

104,740

0

Thailand

0%

57,922

0

Malaysia

0%

56,574

0

India

30%

49,055

14,717

European Union

9%

35,151

3,164

Indonesia

4%

16,555

662

United Arab Emirates

0%

16,418

0

Canada

0%

14,505

0

French Polynesia

8%

953

76

Total

3.5%

4,225,933

151,656

 

Taiwan’s 11.3% tariff on Kiwiberries was responsible for 62% of the overall cost of tariffs on kiwiberry exports. Under the ANZTEC economic cooperation agreement with Taiwan, this will phase out to 0 in 2021. Under the CPTPP, the 6% tariff into Japan will be eliminated from 30 December 2018.

 

SPS market access barriers

Phytosanitary import regulations have been established that allow kiwifruit to be exported to around 60 countries, generally with very few phytosanitary barriers. 

Australia – Like many other industries kiwifruit exporters participate in the offshore pre-shipment inspection (OPI) programme to reduce the risk of clearance failure on arrival in Australia.  However, in 2016 Australia announced that it is seeking an incremental wind-down of the OPI programme due to concerns over the number of its inspectors based offshore (despite the inspectors costs being funded by the exporting country).  The last year of OPI inspections is likely to be 2019, with a greatly reduced number of inspectors available. The OPI programme is very important for trade facilitation and a withdrawal of the programme is concerning. Increased scrutiny of pests at the border and fewer identifications of pests of biosecurity concern to a species level, means the number of fumigations of non-precleared imports is increasing. The Australian authorities are requesting pest free fruit, however many pests of kiwifruit are not of quarantine concern to Australia. Another worrying point is the classification of common pests as quarantine because they may be a vector of disease.

China – During 2016, the Chinese authorities issued a notification regarding a find of the fungus Neofabraea actinidiae on an extremely small volume of kiwifruit exported from New Zealand. N. actinidiae is a fungus that can be implicated in the development of ripe rots in mature fruit after a period in coolstore and has no food safety implications. Zespri and the post-harvest industry introduced significant additional pre-export checking procedures, approved by the Ministry for Primary Industries to reduce the total number of rots arriving in China. Subsequently, export of kiwifruit continued to clear as normal into China and sales were expected to exceed record volumes for the China market. The additional checking procedures are expensive to implement. Rots caused by N. actinidiae are very uncommon although the organism may be associated with other rots and the organism may be present as a latent infection.

 

China - (Kiwiberries) - (Actinidia arguta).  In 2016 China reviewed the list of crops permitted entry to China and added the scientific names associated with the importable commodities.  Kiwiberry had previously been classed as “kiwifruit” and had entered on this basis for several years. However, in the review China considered that Actinidia arguta was not part of the kiwifruit group and kiwiberry was excluded from the list of enterable crops.  Work is still underway to re-open access.

 

Indonesia – Kiwifruit is not subject to the same restrictions as some other fruit and vegetable products for Indonesia. However, there is ongoing uncertainty with regard to Indonesia’s regulatory system. Indonesia granted New Zealand “country recognition” for its food safety systems in December 2014. The renewal of the agreement was confirmed in February 2018. New import licencing requirements have been introduced which may further complicate access to Indonesia.

Iran – Requirements include compulsory fumigation with methyl bromide in New Zealand. Due to transit times and unknown arrival conditions this currently poses an unacceptable risk to fruit quality.

Japan – Japan operates a system of listing non-quarantine pests, which means that if a pest occurs in Japan but is not on that list it is still considered to be a quarantine pest. The NZ Ministry for Primary Industries (MPI) has made positive progress in negotiating for the expansion of the non-quarantine pest list, but fumigations still persist.

Korea - Recent regulations on residue testing upon arrival are significant. These are exacerbated by frequent MRL revisions which mean each supplier or post—harvest operator needs to be re-tested with each change.

Mexico – Fuller’s rose weevil is categorised as a quarantine pest even though records show that it is present in Mexico. Mexico has stated that the only sightings were a number of years previously and that no further sightings have occurred.

Thailand – Thailand’s import conditions for kiwifruit, which were implemented in October 2015, appear simple on paper but the verification is difficult and is limiting the ability to supply this market. In particular, they require an Integrated Fruit Production (IFP) system for controlling the actionable pests on each orchard. IFP systems are not designed to prove control measures but Thailand requires this. Updated labelling requirements in 2018 require pallets to be identified with shipping marks.

Israel - Israel includes Phomopsis sp as actionable rot. This is a cosmopolitan genus that can be present as a secondary rot. The genus is very complex and accurate species identification is difficult. As a result, several shipments of New Zealand fruit have been rejected at the border for what New Zealand regards as a rot associated with over ripe or damaged fruit. There have been no further interceptions since 2014, however we maintain a programme of a reduced shipping window to reduce risk.  This compromises the ability to serve the market.

Jordan – A change to import permits for the 2016 season means that NZ kiwifruit no longer has access to Jordan.  The new requirement asks for an additional declaration that the consignment should be free of any bacteria of Pseudomonas syringae pv. syringae.  Kiwifruit is a well-known host of this common bacterial blast and Zespri has not pursued a case via MPI about this, as it seems to be targeted only to NZ kiwifruit because there is no such requirement for exports from Europe, where this bacteria is also present. 

Labelling – There are international guidelines regarding labelling but Korea, Brazil, India, Malaysia, Qatar, Russia, Vietnam and Argentina all have additional label requirements for application pre-export.