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New Zealand's drought, kiwifruit problems

Staff writer |
This summer's drought has cost New Zealand's land based primary industries around $1.3 billion, according to the Ministry for Primary Industries (MPI).

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"It's been a season of two halves for the land-based industries, with many areas impacted by drought in the second half. The impacts of the severe drought continue and could continue for several seasons, for example many sheep and beef farms need to build breeding stock numbers back up," says Jarred Mair, Sector Policy director.

"As many commentators have said in the past few months, the challenge to the primary industries is to develop resilience - to protect their ability to continue to produce and export, as well as to add value. This will help meet the goal that MPI has set, which is to help the sector double the value of primary sector exports by 2025," asid Mr. Mair.

MPI expects primary sector revenues will increase 2.2 per cent to $24.1billion in the year to June 2014, and to grow at a compound annual growth rate of 7.4 per cent to $29.5billion in 2016/2017.

However, New Zealand is facing another challenge: kiwifruit export earnings are forecast to drop 20 per cent this season.

The Ministry's Situation and Outlook for Primary Industries report released today reports kiwifruit earnings are expected to fall from over $1 billion last season to $830 million this season.

Kiwifruit export volumes in the year to 31 March, 2014 are expected to fall 13 per cent to 88 million with export prices for the same year expected to be lower than previous years due to exchange rate impacts. In the medium term, export prices are expected to strengthen for both green and gold kiwifruit.

The progression throughout most North Island kiwifruit growing regions of the bacterial disease Psa-V is largely blamed for New Zealand exporting nine per cent fewer trays of kiwifruit in the year ended March 31, 2013.

However, higher in-market prices for kiwifruit held export revenue above $1 billion. Export volumes fell four per cent to 46 million trays to Asia, and 10 percent to 44 million trays to Europe.

Differences in the strength of consumer demand and varietal mix resulted in a significant difference in export revenue - $661 million (up eight per cent) from Asia and $290 million (down 16 per cent) from Europe.


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