After a period of considerable difficulty the global kiwifruit market is finally reaching a level of stability. During the 1990s, an explosive increase in global production resulted in a plunge of international prices.
In the first years of that decade, plantations exceeded 66,000 hectares worldwide - almost three times the UK surface.
Global supply by far exceeded the demand for fruit and returns started to fall so dramatically that many producers were unable to cope with the crisis: a situation which worsened by the end of the decade with the economic stagnation caused by the Asian economic crisis.
This resulted in the removal of some 20 per cent of plantations, along with the re-plantation of some improved varieties in more adequate areas in order to cope with the stronger global competition.
GLOBAL PRODUCTION
Global kiwifruit production has rocketed in the last couple of decades. It started slowly in the early 1980s, with New Zealand harvesting 27,000 tonnes, making up almost 70 per cent of the total production. In less than five years, volumes grew by almost eight times. Within the next few years Italy had become the world’s leading kiwifruit provider, leaving New Zealand in second place. Chile came into focus by the mid 1990s, a few years after many producing countries had begun dramatically grubbing plantations in the face of plummeting international prices.
Ten years on, global production is still growing but at a much slower pace. Today there are seven major world-wide kiwifruit producers: Italy, New Zealand, Chile, France, Greece, Japan and the US, which together cover almost 95 per cent of the total production. Of these, Italy is the largest provider, producing some 430,000t last season, followed by New Zealand and Chile, with volumes of 300,000t and 145,000t respectively.
This accounts for two thirds of the total production, with France producing 65,000t and Greece, Japan and the US responsible for significantly lesser volumes. China is also an important producer, with volumes estimated at around 230,000t. However, apart from exporting small quantities to Taiwan and Japan, China largely retains its production for the domestic market. It has been suggested its quantities could increase significantly and extend to other markets once cultivation techniques are improved, enabling it to offer a superior quality product.
AVAILABILITY
For the main destination markets, kiwifruit availability is year-round. The European season starts in early October with harvests from Greece, France and Italy, and runs until mid-May, with the sale of the last stocks of stored Italian fruit. In mid-April, the first Chilean supplies arrive in Europe. This marks the start of the southern hemisphere season, with the most significant Chilean volumes being imported in May, just before the arrival of New Zealand fruit. New Zealand exporters are then in a fortunate position until local production begins again.
EXPORTS
Aside from brief slumps at the beginning of the 1990s and the start of this century, kiwifruit exports have been steadily growing in the last 25 years. Exports from the main producer countries are estimated to be around 850,000t and represent the majority of production. With 400,000t, Italy is the leading exporter, followed by New Zealand and Chile offering 275,000t and 130,000t,
GLOBAL CONSUMPTION
Overall consumption of fresh kiwifruit has grown steadily in the last 20 years, especially in Europe, the world’s largest market. Demand has risen from 150g per capita in 1985 to almost 2kg in 2005. Japan is another large consumer of fresh kiwifruit, getting through 800g per capita every year. However, Asia has struggled to recover the consumption levels experienced before the Asian crisis in the last few years, and demand plummeted from 1kg per year to 0.6kg in 1999.
EUROPEAN PRICES
Prices are generally fairly uniform across European supplies although thanks to its superior volumes, Italy uniquely achieves mass entry to all markets. Last season European prices ranged between E6.5-8.5 at the level of import and generally remained lower than the year before due to the strong volumes at supply.
By early April, Chile had entered the market reaching E12.5 per 10kg case during the period of overlap with Italy, commanding a E4.5-3.5 surcharge on local fruit. Prices plunged during May, plateauing at E11.5 per case before dropping to E10.5 when the first New Zealand volumes arrived, some two weeks behind schedule, in the first week of June.
Thanks to its strong reputation, New Zealand kiwifruit has been commanding higher prices, ranging from E15-17 per 10kg case.
VARIETAL DEVELOPMENT
While Hayward continues to dominate the global kiwifruit supply, new crops of other varieties such as Hort 16-A or Zespri Gold, Summer Kiwi, Baby Kiwi, and others, are slowly being developed. However, unlike in the past, these varieties must be planted and traded with special licenses, showing advantages over Hayward as far as the harvest season is concerned, and an indication of improved post-harvest quality.
Gold is the most renowned variety at an international level and New Zealand has been exporting this variety since 2000, with volumes amounting to some 20 per cent of its total exports.
This variety has been fairly well-received as a premium product, commanding higher prices than Hayward. It has faced fairly good acceptance in international markets, being offered as a premium product at higher prices than Hayward.
The entry of new varieties to this competitive market has widened the consumer spectrum for kiwi, extending its trading period and complementing the existing traditional product. However, this challenge has not been without commercial difficulties, such as coordinating delivery times and new quality requirements. Besides, it is important not to forget that, as the supply of a premium product becomes significant, it leaves its premium condition and prices drop, which is expected to happen in the mid-term with Gold kiwifruit.
MARKET REGULATIONS
While there is an overlap between the different kiwifruit supplies in the European market, there is a growing concern among main suppliers as to how to penetrate the market at the most convenient time, when the previous supply has been somewhat cleared.
Regulation has been in place since 1983, implemented by the International Kiwifruit Organisation (IKO), a representative body for all the main kiwifruit providers.
This organisation has expanded every year, with members assembling annually in September to discuss issues of common interest, such as the exchange of production figures, international co-operation and quality standards. In addition, members attempt to assess market entrance dates and supply volumes to keep each provider afloat.
Returns have improved since the late 1990s and the future looks a little brighter. For New Zealand prices have risen from US$0.50 per kg in 1997 to US$0.80 in the 2003/04 season, while Chile has enjoyed a growth from US$0.25 to US$0.40.
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