It estimated the country’s entire horticultural crop could be worth $6.3 billion by 2021, with kiwifruit being the big diesel engine driving most of that growth.
The kiwifruit industry’s own estimates were that it would be selling $4.25b of fruit by 2025.
But while kiwifruit might be the big driver, the report also picked strong growth in exports from lower profile crops including avocadoes, pears, apples and wine.
That growth in kiwifruit sales was expected however to take a check in this year’s harvest, dropping 4.4% to $1.6b after last year’s record crop.
MPI’s estimate of the industry being worth $2.2b by 2021 appeared light against Zespri’s own estimates the industry would be generating $4.25b by 2025.
The report estimated production of Green kiwifruit would fall in 2017 because of lower spring flower numbers pushing final fruit volume back.
While the kiwifruit growth story was relatively well known, the wine industry had continued a strong trajectory that was starting to push the $2b mark by the end of the decade.
Forecasts were for the sector to reach $1.7b this year, a 7% increase from last year despite some earthquake damage suffered in the key sauvignon blanc region of Marlborough and the impact taking 2% of production off the 2016 vintage that was held in storage at the time of the quake.
Strong demand in core markets and a relatively weak New Zealand dollar were supporting prices in the sector, with United States exports, in particular, still trending upwards with NZ being the fastest-growing source of imported wine by value to that market.
The average imported price of $8 a litre put NZ second only to France in its average import price, with Marlborough sauvignon blanc a key driver of that growth.
After a strong start and high expectations in the sector, China’s growth had slowed in recent years, growing only 3.5% in the past year compared to the 23% growth in the US. The Chinese slowdown came as a response to the Chinese government reducing expenditure.
The Chinese market has been characterised by its preponderance of red wines, with syrah, cabernet and merlot varieties comprising 60% of sales, compared to the 95% of sales in the US that sauvignon Blanc comprised.
The report took a conservative view on apple and pear prospects for 2017 after an exceptional run of crop and value growth driven by high demand from Asian markets.
Future growth was estimated to be driven as much by increases in existing orchard productivity as it was by increased orchard area, with plantings expected to have increased to 11,000ha by 2020, up from 9800ha today.
But the report threw a conservative light over the industry’s buoyancy with a cautionary tone on the need for better alignment of supply with market demand for niche varieties and rising global supply providing increased competition.
The risk of a higher dollar in a depreciated Euro-UK pound environment was also seen as a risk to export volumes to those markets.
Thanks to avocados experiencing an “on-year” for crop in 2017 that fruit was expected to reach an export volume record of 4.9 million trays to June 2017, totalling $149m in export values.
With upcoming approval anticipated for access to China and significant growth experienced in Japan, South Korea, Taiwan and India the sector’s prospects were looking firm with a reduced reliance on the traditional Australian off-peak market.
Meantime, vegetable export growth was being led, perhaps unexpectedly, by onions with increased plantings of the red variety in particular being targeted for markets in Asia.
