Fresh Deciduous Fruit Semi-annual

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Last updated: 30 May 2011

The planted area estimate for MY2010 (October 2010 to September 2011) has been revised downward by 89 hectares (ha) to 9,061 ha. Planted area is forecast to shrink by another 108 ha (1.3%) to 8,943 ha in MY 2011.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 5/13/2011 GAIN Report Number: NZ1108 New Zealand Fresh Deciduous Fruit Semi-annual Fresh Apple and Pear Production and Exporting May 2011 Approved By: Laura Scandurra Prepared By: David Lee-Jones Report Highlights: The planted area estimate for MY2010 has been revised downward by 89 hectares (ha) to 9,061 ha. Planted area is forecast to shrink by another 108 ha to 8,943 ha in MY 2011. The MY2010 production estimate has been revised upward by 1% to 476,000 tons but will likely fall to 461,650 tons in MY 2011. Executive Summary The planted area estimate for MY2010 (October 2010 to September 2011) has been revised downward by 89 hectares (ha) to 9,061 ha. Planted area is forecast to shrink by another 108 ha (1.3%) to 8,943 ha in MY 2011. The MY2010 production estimate has been revised upward by 1% to 476,000 tons. A slightly lower crop, due to the biennial nature of apple production, combined with a slight reduction in planted area suggest that production in MY 2011 will fall to 461,650 tons, a drop of 14,000 tons or 2.9%. Total apple exports reached 258,982 tons in MY 2009, up 1,982 tons from the previous estimate. Post has revised the MY 2010 export estimate upward by 1.6% to 292,000 tons. The United States was the largest single-country export destination in MY2009 (42,108 tons), second only to continental Europe on a regional basis. North America has long been a significant region for NZ exporters but has assumed even more importance over the last five years as exporters have diversified away from reliance on the European market. A WTO panel published its decision regarding New Zealand apple access to the Australian market at the end of June 2010. The panel found that Australia?s measures are inconsistent with its legal obligations as a WTO member under the WTO SPS agreement. Australia appealed but lost the case. The import risk assessment is expected to be completed and the technical work plan adopted by August 2011. All protocols are expected to be in place by September, which implies that some fruit from the 2011 harvest could be exported to Australia before the end of the calendar year. Industry contacts suggest that New Zealand apple exports to Australia could be in excess of 20,000 tons per year. PSD Tables Apples, 2009 2010 2011 Fresh 2 0 0 9 /2010 2010/2011 2011/2012 New Market Year Begin: Oct Zea Market Year Begin: Oct 2009 Market Year Begin: Oct 2010 land 2011 USDA Old Old USDA Old (HA)/(MT O New USDA fficial Post Po Official Po New st Po New sst Po Officiast Post ) l t Area Planted 8 ,950 8,950 8,897 9,150 9,150 9,061 8,943 Area 8,630 8,630 8,630 9,045 9,045 8,850 8,750 Harvested Bearing Trees 0 0 0 0 0 0 Non-Bearing 0 0 0 0 0 0 Trees Total Trees 0 0 0 0 0 0 0 Commercial 404,64 404,64 406,63 455,00 455,00 460,00 445,65 Production 5 5 3 0 0 0 0 Non-Comm. 16,000 16,000 16,000 16,000 16,000 16,000 16,000 Production Production 4 20,64 420,64 422,63 471,00 471,00 476,00 461,65 5 5 3 0 0 0 0 Imports 1,355 1,355 1,349 1,500 1,500 1,000 1,350 Total Supply 4 22,00 422,00 423,98 472,50 472,50 477,00 463,00 0 0 2 0 0 0 0 Fresh Dom. 60,000 60,000 60,000 60,000 60,000 60,000 60,000 Consumption Exports 257,00 257,00 258,98 287,50 287,50 292,00 288,00 0 0 2 0 0 0 0 For Processing 1 0 5,00 105,00 105,00 125,00 125,00 125,00 115,00 0 0 0 0 0 0 0 Withdrawal 0 0 0 0 From Market Total 422,00 422,00 423,98 472,50 472,50 477,00 463,00 Distribution 0 0 2 0 0 0 0 TS=TD 0 0 0 0 Pears, 2009 2010 2011 Fresh 2009/2010 2010/2011 2011/2012 New Z Market Year Begin: Oct 2009 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 ealand Official Post New Official Post New Official Post New Data Estimate Post Data Estimate Post Data Estimate Post (Ha/MT) Data Data Data Area Planted 431 431 412 431 431 431 473 Area 431 431 412 431 431 431 473 Harvested Bearing 0 0 0 0 0 0 Trees Non-Bearing 0 0 0 0 0 0 Trees Total Trees 0 0 0 0 0 0 0 Commercial 14,000 14,000 14,054 15,000 15,000 14,100 14,050 Production Non-Comm. 200 200 200 200 200 200 200 Production Production 1 4 ,200 14,200 14,254 15,200 15,200 14,300 14,250 Imports 3,500 3,550 3,523 3,300 3,300 3,500 3,550 Total Supply 1 7 , 700 17,750 17,777 18,500 18,500 17,800 17,800 Fresh Dom. 9,600 10,300 10,300 10,300 10,300 10,300 10,300 Consumption Exports 5,600 5,000 5,027 5,700 5,700 5,000 5,000 For 2,500 2,450 2,450 2,500 2,500 2,500 2,500 Processing Withdrawal 0 0 0 0 0 0 From Market Total 17,700 17,750 17,777 18,500 18,500 17,800 17,800 Distribution TS=TD 0 0 0 Note: Data included in this report is not official USDA data. Official data can be found at http://www.fas.usda.gov/psd Production Planted Area Based on the latest Pipfruit NZ statistics, the planted area estimate for MY2010 (October 2010 to September 2011) has been revised downward by 89 hectares (ha) to 9,061 ha. Planted area is forecast to shrink by another 108 ha (1.3%) to 8,943 ha in MY 2011. While nurseries are reporting that there are very few trees on order for next year, at least one sizable development is going ahead ahead. The Wakatu Corporation, in partnership with ENZA (a Turners & Growers subsidiary), has planted Envy apples on 37 ha of land near Nelson. It is the single largest planting of Envy apples in New Zealand. Apple Production The MY2010 production estimate has been revised upward by 1% to 476,000 tons. The domestic New Zealand industry had initially expected a higher production level (on the order of 503,000 tons). However, since the harvest has gotten underway, production expectations have fallen and industry estimates have been revised downward. Preliminary reports indicate that the Royal Gala crop fruit size is smaller. A slightly lower crop, due to the biennial nature of apple production, combined with a slight reduction in planted area suggest that production in MY 2011 will fall to 461,650 tons, a drop of 14,000 tons or 2.9%. Pear Production The forecast for MY2010 production has been revised downward by 6% to 14,300 tons. MY 2011 production is forecast to remain at roughly this level (14,250 tons). Grower Returns Prices received by NZ growers in MY 2010 are reportedly similar to those received last year. However, the strong New Zealand dollar is expected to depress grower returns. While growers are hoping NZ dollar returns will be similar or slightly better than last year, the strong NZ dollar combined with a larger crop, suggests this might be difficult to achieve. Breakeven costs in MY 2010 are likely be somewhere between NZ $20 and NZ$21.50/TCE compared to approximately NZ $21.75/TCE in MY2009 and NZ $20.15/TCE in MY2008. The weighted average price for conventionally grown apples in MY 2009 was NZ $22.22/tray carton equivalent (FAS basis), which is 8% higher than the MY 2008 average of NZ $20.52/TCE. Organic apples averaged NZ $27.35/TCE FAS in MY 2009. This was a substantial improvement (29%) over the NZ$21.15/TCE FAS received the previous year, which was reportedly disastrous for growers. Consumption For both MY2010 and in MY2011, apple consumption is expected to remain constant at 60,000 tons. Pear consumption is forecast at 10,300 tons. Trade Apple Exports Total apple exports reached 258,982 tons in MY 2009, up 1,982 tons from the previous estimate. Post has revised the MY 2010 export estimate upward by 1.6% to 292,000 tons. The MY 2010 export forecast is not as high as it otherwise would have been because of a significant upturn in prices of apples for processing. Many growers, who were negatively impacted by poor export prices in MY 2009, committed total production blocks to processing to take advantage of high processing prices. Prices for apples for processing were reportedly 25-75% better than last year. Exports are forecast to fall to 288,000 tons in MY 2011 due to an expected decline in production and a smaller percentage of apples going to processing. North America The United States was the largest single-country export destination in MY2009 (42,108 tons), second only to continental Europe on a regional basis. North America has long been a significant region for NZ exporters but has assumed even more importance over the last five years as exporters have diversified away from reliance on the European market. Europe The European market accounted for approximately 50% of NZ apple exports in MY 2009, down from 71% in MY 2004. Asia Asia is now a top destination for NZ apple exports. China alone accounted for nearly 23% of total exports in MY 2009. Asia?s proximity to New Zealand and growing middle class make it an attractive destination for New Zealand exporters. Returns from Asian markets for New Zealand growers have traditionally been good, particularly at the start and the end of the season. However, grower returns this year will be impacted by the strong NZ dollar and the large Southern Hemisphere Royal Gala crop. Braeburn Exporters Group After the extremely disappointing results in 2010 when growers received prices averaging less than NZ $18.25 per ton (ranging between NZ $14 and $22.50/TCE), Pipfruit NZ facilitated the creation of the Braeburn Exporters Group. Reportedly 90% of Braeburn exporters, representing approximately 95% of the export volume, have signed up. The members have signed a code of conduct to: Send only Class I fruit; Share information on export volumes; and, Contribute to a promotion campaign in Europe In return, exporters will be able to use the 100% Pure New Zealand brand and receive marketing assistance. New Zealand Export Destination Statistics For Fresh Apples Year Ending Series: September, 2005 - 2010 Share of Partner Quantity (metric tons) Exports Co % change 2010 untry 2005 2006 2007 2008 2009 2010 over 2009 in 2010 Total EU excl UK 160886 112240 113494 99134 116452 94619 -18.7% 36.5% United States 32455 37578 47669 32958 45678 42108 -7.8% 16.3% United Kingdom 66059 59181 63076 43526 50286 36297 -27.8% 14.0% Taiwan 25762 15204 18283 20599 16450 15634 -5.0% 6.0% Thailand 840 2219 3160 7435 9085 12860 41.6% 5.0% Hong Kong 4769 5583 6341 8160 13454 10935 -18.7% 4.2% United Arab Emirates 2577 2727 4591 6166 8962 7148 -20.2% 2.8% India 2522 3861 3675 4966 5331 6058 13.6% 2.3% Canada 4135 4951 6177 5613 4770 5810 21.8% 2.2% Singapore 3637 4680 4824 5736 5894 4517 -23.4% 1.7% All Other Destinations 15213 17317 20730 26861 26654 22996 -13.7% 8.9% World Total 318855 265541 292020 261154 303016 258982 -14.5% 100.0% Source: Global Trade Atlas Source: Global Trade Atlas Apple Imports With plentiful supplies of domestically grown fruit available in MY2010, imports are forecast to dip down to 1,000 tons but recover back to 1,350 tons in MY2011. New Zealand Imports of Fresh Apples Year Ending Series: September, 2005 ? 2010 Quantity Partner Country Unit 2005 2006 2007 2008 2009 2010 United States T 343 1169 1082 1572 1618 1213 New Zealand T 0 64 0 0 41 125 China T 0 0 0 0 0 11 Australia T 0 1 0 0 0 0 Canada T 0 0 20 0 0 0 India T 2 1 0 0 0 0 United Kingdom T 0 0 0 0 0 0 World Total T 344 1235 1102 1572 1658 1349 Source: Global Trade Atlas Pear Exports Pear exports are forecast to remain at 5,000 tons through MY2011. Pear Imports Imports are forecast at 3,500 and 3,550 tons in MY2010 and MY2011, respectively. New Zealand Imports of Fresh Pears Year Ending Series: September, 2005 ? 2010 Quantity Partner Country Unit 2005 2006 2007 2008 2009 2010 Australia T 1747 1532 950 1452 1458 1564 United States T 889 1230 1388 1084 1223 1340 China T 722 993 551 629 593 425 Korea South T 51 161 92 149 168 167 South Africa T 15 0 0 0 0 22 New Zealand T 0 0 0 0 0 4 Canada T 0 21 0 0 0 0 World Total T 3424 3937 2980 3314 3442 3523 Source: Global Trade Atlas Policy WTO Apple Case with Australia A WTO panel published its decision regarding New Zealand apple access to the Australian market at the end of June 2010. The panel found that Australia?s measures are inconsistent with its legal obligations as a WTO member under the WTO SPS agreement. Australia appealed the decision and the case was heard in Geneva in mid October 2010. The appeal panel disallowed Australia?s appeal. A time table has been agreed to with August 17, 2011 being the deadline for the Import Risk Assessment (IRA) to be completed and the Technical Work Plan ready to be adopted. According to industry contacts, the draft IRA should be circulated the first week in May 2011. All protocols are expected to be in place by September, which implies that some fruit from the 2011 harvest could be exported to Australia before the end of the calendar year. Industry contacts suggest that New Zealand apple exports to Australia could be in excess of 20,000 tons per year. In the past, it was reported that infrastructure improvements such as an increase in cold storage capacity may be necessary to achieve this level of sale but some current commentary suggests that the current infrastructure could handle the storage requirements. Some in the industry people that Jazz and/or the Pacific series apples may do well in Australia and could boost consumption of apples rather than just displace domestic apples. Free Trade Agreements The following agreements are in force: New Zealand-Hong Kong, China Closer Economic Partnership (NZ-HK CEP entered into force on 1 January 2011) New Zealand-Malaysia Free Trade Agreement (MNZFTA entered into force on 1 August 2010) ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) - 2010 New Zealand-China Free Trade Agreement (NZ-China FTA) - 2008 Trans-Pacific Strategic Economic Partnership (P4) - 2005 New Zealand-Thailand Closer Economic Partnership (NZTCEP) - 2005 New Zealand-Singapore Closer Economic Partnership (NZSCEP) - 2001 Australia-New Zealand Closer Economic Relationship (CER) - 1983 In addition, the New Zealand Government is currently negotiating the following FTAs: New Zealand-Gulf Cooperation Council Free Trade Agreement (NZ-GCC FTA negotiations have been concluded but not yet signed) Expansion of the Trans-Pacific Strategic Economic Partnership (TPP) New Zealand-Korea Free Trade Agreement (NZ-Korea FTA) New Zealand-India Free Trade Agreement (NZ-India FTA) New Zealand-Russia-Belarus-Kazakhstan Free Trade Agreement (NZ-RBK) While exporters report that FTAs do not drive business decisions, they do provide a framework to work out trade-related issues, especially SPS and non-tariff barriers, and, in some cases, significant market access advantages. Industry Developments New Varieties Rockit Rockit is a new sweet, red apple bred by Plant and Food, a crown research institute, and commercialized by Prevar. The license for the cultivar has been transferred to Havelock North Fruit Company Ltd, which is planting and multiplying the cultivar and developing a brand image. This cultivar is unusual in that it is small, only 1.5 times the size of a golf ball. The company aims to position the apple as a snack food and markets them in clear bio-degradable tubes of 3 or 5 apples. Koru Koru is a red apple with an acid initial taste but a sweet aftertaste. The original plant was spotted by an enterprising orchardist in a flower garden near Nelson. DNA tests show it to be a Braeburn Fuji cross. It is being promoted as an apple that has great eating qualities along with good yields, packout rates and storage qualities. Industry News Mr Apple/Scales Group ?Mr Apple?, an apple producer and exporter that handles approximately 10% of the national export crop, is part of a group that was 80% owned by a finance company that failed in 2010. The group?s assets have been sold by the receiver to Direct Capital, a local investment firm. The New Zealand Government?s Superannuation Fund and the Accident Compensation Corporation have been named as co-investors. This means Mr Apple is likely to be kept intact as the Government investors will be long term holders of the shares. Turners & Growers Guinness Peat Group owns 66% of T&G, which in turn owns ENZA. ENZA exports around 20-25% of New Zealand?s total apple exports and is the largest apple juice processor. GPG is reportedly planning to sell the T&G business. Post harvest and Research Developments SmartFresh Smartfresh is a post harvest/coolstorage treatment for apples that inhibits ripening and reduces cool storage energy costs by minimizing the need to chill stored apples. The chemical blocks ethylene produced by apples from reaching the plant cell receptors in the apple. (Ethylene regulates ripening in apples.) While good success has been achieved with several apple cultivars, use with Braeburn has reportedly been disappointing as it exacerbated Braeburn Browning Disorder and diffuse core browning. The cost of Smartfresh is $1.40/TCE, which unless storage for a premium market can be achieved, it not profitable under the present economic climate. Despite this, the use of Smartfresh has reportedly grown significantly in 2011. Biennial Bearing Research A group of French and New Zealand researchers using the apple genome, which was completed in mid 2010, are using the genome to help uncover the secrets behind biennial bearing. Dry Matter Content (DMC) The effect of increasing DMC on taste and quality of kiwifruit is well known and growers have been rewarded with higher prices for increased DMC fruit. Work by Plant & Food, AgFirst (a consultancy group) and Heartland Fruit has shown a positive relationship between DMC and consumer preference in apples. Nearly every aspect of consumer preference, such as higher blush color, higher starch concentration, and higher brix is positively related with DMC.
Posted: 28 May 2011, last updated 30 May 2011

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