Friday, March 29, 2024

Big boost for SunGold orchards

Avatar photo
Zespri has significantly boosted the land available for SunGold licences with the area growers can tender on up by more than 50% on original plans amid a bullish outlook for the fruit’s demand.
Reading Time: 2 minutes

Chairman Peter McBride said Zespri would open up 700ha for SunGold licences this season, well ahead of the 400ha originally planned.

The 700ha a year would continue to be offered annually for the following four years, taking the new SunGold planting area from now until 2022 to 3500ha.

That was on top of the 800ha of SunGold planted in the last two years.

The original plan was to hold new licensed area at 400ha a year for seven years but now the total new area of SunGold over the seven years would be 4300ha by 2022, compared to the original goal of 2800ha.

Zespri spokesman Oliver Broad confirmed the increase was a leap that came amid expectations SunGold demand would continue to outstrip supply despite the earlier increases.

SunGold production was 50 million trays. Given maturity times and the increased areas being planted, estimates were that once all the 3500ha extra area was at full production sometime beyond 2022, total SunGold production would effectively double to more than 100m trays.

Broad said Zespri was very mindful it was walking a tightrope between over and under supply with the fruit.

But the greatest challenge in recent seasons had been to maintain steady supply to meet retailer expectations.

“Our aim is to keep demand ahead of supply.

“We have done a lot of hard number work to arrive at these licence areas and remain confident the increase will not result in oversupply. The popularity of SunGold is such we have had to work hard to keep up.”

For growers who got in early on the SunGold change after the Psa outbreak the fruit had proved to be literal gold.

Early licences were issued for about $7000 a hectare and the first tranche of 400ha averaged returns of $171,000 a hectare. Last year’s 400ha sold for $235,000 a hectare.

Bay of Plenty SunGold kiwifruit orchards were now fetching $1m a canopy hectare with some selling less than a week after being listed.

Broad acknowledged the extra SunGold area being licensed represented significant extra plant variety rights income for the kiwifruit marketer.

If prices remained similar to last season the 700ha tranche would earn the marketing company almost $165m in rights income this season.

“Obviously this is a significant level of income and is ultimately returned to growers through dividends.”

Tendering for the new area would all be from one pool, rather than splitting allocated area into new orchards and Green conversions.

“Last time we had a fixed Green conversion area due to the rapid increase in Green production we had seen between only two seasons but we are confident about how growers will decide whether to use green fields or cut over from Green when buying their rights.”

Bids for new licences close on April 11.

Total
0
Shares
People are also reading