Tuesday, March 19, 2024

SunGold licences come gold plated

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The SunGold kiwifruit variety has again exceeded the previous year’s licence values with the final tender for this year’s tranche closing off at an average of $400,000 a hectare, up 37%.
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The annual offering of 700ha of new licences for SunGold was oversubscribed, with bids totalling 1660ha.

Zespri grower and alliances officer Dave Courtney said the values reflect ongoing optimism among growers about SunGold’s value and prospects.

“We run a closed tender process and put out as much information as we can, including a five-year outlook, for people to make their own decisions on what they value the licences at,” he said.

The $400,000/ha puts SunGold at the top of fruit licensing values, with the next closest being Envy apples at about $100,000/ha. 

It means the licence income has become an integral part of Zespri’s non-fruit earnings, accounting for $211 million, or 6% of company revenue.

Several bidders were, for the first time, in the 20ha-plus category. That reflects the emergence of some larger investment-backed operators either converting from Green fruit or establishing new orchards.

Six bidders sought more than 20ha, three 15-20ha and five were in the 5-10ha size. 

The average size of the successful bids was 2.4ha, representing a continuing gradual rise in average licence area bids from 1.5ha in 2016.  

Last season SunGold fruit averaged $11.86 a tray or $160,000/ha average return before costs.

Organic SunGold also continued to reflect increasing competition for growing the fruit, with the 50ha allocated averaging $219,600/ha, up from $153,000/ha last year. 

This year’s tender round also marked the first time the Red variety was available for commercial orchardists, with 150ha allocated for bidders. The round averaged $62,000/ha and again was oversubscribed, by 110ha.

“The fact it was oversubscribed tells you that growers are confident enough to have a go at growing it,” Courtney said. 

Zespri has made no secret to growers about the fruit’s shortcomings, including issues around a shortened shelf life, smaller fruit size and lower yields than the prolific SunGold variety.

“Over time you get a view and what you learn about varieties in the pre-commercial stage and as soon as you get it out to growers you learn more, both positive and negative. 

“But the taste is good and demand is strong. On a per tray price basis we believe it could be equal to SunGold or a bit above that.” 

This year Red sales have been limited to domestic supply, Singapore and Japan.

The tender results came as Zespri announced its full year 2019-20 results, declaring a profit of  $200.8 million.

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