This year’s plant licencing tender round has bought record shattering prices across the SunGold and new red fruit portfolio, with the average tender price for SunGold making $550,000 a hectare.
This is streaks ahead of last year’s record setting $400,000/ha value, with the 750ha of SunGold licence offered also oversubscribed by 2:1 on average across the organic and conventional areas on offer.
Zespri’s chief innovation and sustainability officer Carol Ward says growers were demonstrating a high level of confidence in the fruit, with tenders including about 200ha of vines to be grafted from Green to SunGold, and 400ha of new orchard plantings.
The nature of about 100ha of plantings is yet to be determined.
The 750ha of SunGold put up for tender included 50ha of SunGold Organic variety, and this was oversubscribed by almost three to one.
Even the red variety, still in its early stages of crop and market development has experienced a significant lift from last year’s $62,000 a hectare value. It tendered at an average of $75,000 a hectare for the 350ha on offer, up from 150ha last year.
Again, this offer was oversubscribed 2:1.
Zespri has acknowledged the challenges in developing red, with shelf life and size being an issue.
But Ward says early consumer feedback indicates the berry-like flavour is popular, and the taste profile is retained even as the fruit softens.
Zespri launched Red in China in late April with 20,000 cartons expected to be marketed there this year.
Ward says Zespri was not overly concerned about the loss of about 200ha of green crop grafting over to SunGold affecting the portfolio mix.
“We are continuing to see strong consumer demand for SunGold. We are well aware SunGold is attractive for Green growers to change to. But a lot of green growers are also happy growing green fruit,” she said.
Areas tendered for include both smaller (less than 2ha) and larger new conversion areas, greater than 10ha.
Last estimates for orchard gate returns for this season are similar to last year’s with green guidance range of $6-$7.30 a tray and orchard gate returns of $75,000 a hectare. SunGold are estimated to be worth $10-$12.60 a tray and generate an average of about $170,000/ha
Next year is the final confirmed 750ha tender for SunGold, with the following four years to be confirmed for between 350ha and 750ha.
The licence tender process has proved to be a windfall for Zespri’s bottom line and shareholders who have the income returned as dividend payment through profit distributions.
This year’s licence income is estimated to be between $430 million and $435 million, compared to last year’s $305 million.
Plant variety rights mean Zespri’s SunGold variety protection has until 2039 to run.
