6.1.1      Kiwifruit industry profile

New Zealand’s 2,681 kiwifruit growers produce approximately 149 million trays for export from 12,692 productive hectares. The Bay of Plenty is the focus of kiwifruit growing (principally Katikati, Te Puke, Tauranga and Opotiki) producing over 80% of the crop.

The value of New Zealand kiwifruit export earnings in 2017/18 was $1.859 billion, which was 12% up on 2016/17.

The New Zealand kiwifruit industry continues to recover from the devastating effects of a bacterial canker disease specific to kiwifruit, Pseudomonas syringae pv. actinidiae (termed Psa). Psa was detected in New Zealand in November 2010 and rapidly caused widespread and severe impacts to NZ's kiwifruit industry. Psa is also present in a number of countries including Italy, Japan, South Korea, Chile, and most recently Australia. There is no current cure for the disease.

The New Zealand kiwifruit industry’s dominant ‘Hayward’ variety (‘green’ kiwifruit) is relatively tolerant to the disease and new varieties are being progressed (FreshFacts 2013).

More than 4,600 hectares of the new gold kiwifruit cultivar, commonly known as Gold3, have now been licensed in New Zealand with more than 60 million trays produced in 2018. The new cultivar was fast-tracked through commercial launch in response to the identification of Psa in 2010 and is a cornerstone in the Psa recovery pathway and the major driver of the kiwifruit industry’s expansion. SunGold’s market performance has been very strong and as a result Zespri has released an additional 400 hectares of licence in 2016, 400 hectares in 2017 and 750 hectares in 2018.

The industry-funded entity, Kiwifruit Vine Health (KVH), leads the New Zealand recovery from Psa. This includes a comprehensive research and development programme involving researchers from New Zealand and around the world, working to develop strategies to combat the disease. KVH is also tasked with leading wider biosecurity for the kiwifruit industry. Its vision is “to achieve a high health status of kiwifruit vines, to enable a thriving and profitable New Zealand kiwifruit industry”. The key focus areas in support of this vision are: advocacy, promoting best practice biosecurity to growers, providing technical advice, removing wild kiwifruit and abandoned orchards, profiling new and emerging risks and managing industry preparedness and response.

 

Table 6.1.1: Kiwifruit industry statistics

Season (to 31 March)	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
Trays submitted (million)	109.4	107	105.9	119.5	105.7	97.69	97.8	123.4	148.9	124.4
Trays sold (million)	100	98.6	98.1	109.1	101.3	95.1	95.2	117.0	137.7	123.2
Yield (trays/ha)	8.866	8,546	8,255	9556	8621	8,684	8,076	10,157	11,838	9579
Planting (ha)	12,337	12,525	12,825	12500	12263	11,250	11,233	12,185	12,578	12,692
Growers	2,710	2,711	2,706	2662	2636	2,556	2,540	2,516	2,435	2,681
Packhouses	71	71	67	63	59	54	50	51	50	56
Coolstores	92	77	83	79	76	68	62	64	73	67

As a result of the Kiwifruit Industry restructuring Act 1999, Zespri Group Ltd is a single desk exporter of kiwifruit to countries other than Australia. Zespri Group Ltd (Chief Executive – Dan Mathieson, www.Zespri.com) is a private company, employing around 600 people and owned by current and past New Zealand kiwifruit growers.

Kiwifruit exported to Australia are a prescribed product under the New Zealand Horticulture Export Authority Act (NZKPGA Product Group Manager – Terry Richards), and the 12 HEA-licenced exporters to Australia are represented by Kiwifruit Exporters To Australia (KETA, www.keta.co.nz). Kiwifruit can be exported to countries other than Australia in collaboration with Zespri by applying to the industry regulator, Kiwifruit New Zealand, for a collaborative marketing programme. In 2017/18 there were 13 companies operating 36 collaborative marketing sales programmes with Zespri, exporting just over 2.3 million trays of kiwifruit from New Zealand to markets other than Australia.

The interests of growers are represented by New Zealand Kiwifruit Growers Incorporated (Chief Executive – Nikki Johnson, www.nzkgi.org.nz). NZKGI’s vision is to be a strong grower advocacy organisation that leads growers and engages with industry partners.  It has a mission to advocate, protect and enhance the commercial and political interests of NZ kiwifruit growers. NZKGI activities are led through strategic objectives in the areas of Labour & Education, External Relations, Industry Stability, Performance and Organisational Management.

New Zealand kiwifruit and kiwiberry is exported under the following four HS Codes (refer Chapter 7):

• 0810.50.00.10: kiwifruit, gold fleshed, fresh
• 0810.50.00.19: kiwifruit, green fleshed, fresh
• 0810.50.00.29: kiwifruit, other than gold or green fleshed, fresh
• 0810.90.00.55: kiwiberry

 6.1.2  Kiwifruit exports

Kiwifruit continues to be New Zealand’s largest single horticultural export by volume and value with exports exceeding $1.8 billion in 2018. This represents an 11% increase in value over 2016, while volumes have only increased by 1% over this time period, indicating that kiwifruit are earning a significantly higher return per tonne than they did in 2016.

The European Union, China and Japan take 27.5%, 24.6% and 21.3% of all kiwifruit exported respectively by value. Exports to these markets increased by 18%, 23% and 2% respectively since 2016. The per tonne average value of kiwifruit exports to each of these markets increased by 15.7%, 13.6% and 9.8% with exports to China now achieving a higher per tonne value ($4,506) than any other market with the exception of Singapore ($5,116).

Table 6.1.2: Kiwifruit (0810.50.00) export markets 2016-18(year ending June, tonnes and $NZ FOB)

Market	2016		2017		2018
	Volume	Value	Volume	Value	Volume	Value
European Union	200,317	433,219,812	195,071	419,752,840	204,370	511,287,055
China	93,646	371,369,466	97,611	364,843,246	101,457	457,159,330
Japan	103,839	390,229,542	95,359	381,454,583	96,122	396,703,399
Taiwan	39,570	154,124,390	37,781	144,676,106	35,360	137,711,850
Korea, Republic of	21,816	56,316,782	30,034	86,045,079	28,196	91,591,502
United States of America	19,046	58,984,858	19,158	59,876,730	22,119	65,637,899
Australia	17,549	41,736,216	17,802	40,461,036	16,043	42,383,802
Hong Kong	7,898	35,205,294	6,841	29,313,601	6,559	29,129,510
India	4,886	13,378,656	10,114	18,078,842	7,380	16,139,068
Singapore	3,588	14,630,687	3,606	15,823,400	3,033	15,517,921
Canada	4,403	11,546,642	5,039	12,839,847	4,959	14,196,861
Vietnam	2,278	8,808,704	3,090	11,425,459	3,240	12,651,264
Malaysia	4,909	16,467,863	5,102	16,100,194	2,965	10,543,035
Indonesia	3,681	12,809,965	3,197	11,072,114	2,691	9,943,090
Brazil	2,482	6,737,262	2,857	6,713,132	2,974	7,555,171
Thailand	2,759	8,931,780	3,130	9,242,180	2,267	7,209,883
United Arab Emirates	2,442	7,633,768	2,132	6,433,906	1,969	6,487,963
Mexico	1,003	2,964,982	2,368	5,664,930	1,848	4,689,192
Saudi Arabia	988	3,075,458	1,366	3,936,322	1,186	3,792,932
South Africa	1,442	3,321,711	1,636	3,122,285	1,576	3,131,751
Philippines	1,098	2,971,330	1,061	2,700,888	1,078	2,904,294
Israel	731	1,957,427	976	2,678,624	891	2,774,632
Kuwait	851	2,728,250	714	2,187,434	592	2,004,743
Russia	927	2,229,212	934	2,134,987	742	1,937,696
Mauritius	542	1,433,407	548	1,364,843	378	1,041,009
Bahrain	347	1,111,416	336	1,028,152	284	949,083
Reunion	310	784,858	406	995,914	329	907,798
New Caledonia	208	594,898	287	772,794	302	764,022
French Polynesia	186	593,434	154	500,320	199	707,525
Costa Rica	212	630,155	171	472,452	158	416,828
Argentina	49	104,442	146	308,069	98	229,348
Myanmar	10	40,444	71	245,982	64	220,364
Fiji	47	128,161	100	226,963	69	198,693
El Salvador	136	397,425	112	300,222	77	188,569
Guatemala	68	201,727	113	308,373	68	178,814
Pacific Islands	18	57,081	27	75,180	22	69,948
Papua New Guinea	4	10,021	4	11,425	1	3,232
Qatar	256	780,097	161	459,098	0	0
Lebanon	236	643,245	117	266,783	0	0
Maldives	0	0	0	5	0	0
Cambodia	17	58,564	0	0	0	0
Total	544,795	$1,668,949,432	549,732	$1,663,914,340	551,666	$1,858,959,076
% change (Yr/Yr)	19%	41%	1%	0%	0%	12%

Source: Statistics New Zealand

 

NZ KiwiBerry Growers Inc. is the industry body that represents kiwiberries. Exports of kiwiberries are regulated under the Kiwifruit Export Regulations and the HEA (for Australia).

Table 6.1.3: Kiwiberry (0810.90.00.55) export markets 2016-18 (year ending June, tonnes and $NZ FOB)

Market	2016		2017		2018
	Volume	Value	Volume	Value	Volume	Value
Australia	96	1,385,389	98	1,230,376	116	1,627,279
Taiwan	57	948,753	56	894,458	59	835,526
United States of America	31	394,612	47	658,975	53	651,030
Japan	9	153,729	3	45,525	26	405,011
Hong Kong	20	340,192	48	773,012	28	355,214
Singapore	10	154,223	6	87,883	8	104,740
Thailand	2	35,544	1	16,173	4	57,922
Malaysia	3	46,685	3	45,588	4	56,574
India	0	0	0	0	3	49,055
European Union	1	17,131	4	75,085	2	35,151
Indonesia	1	17,264	1	19,562	1	16,555
United Arab Emirates	0	0	1	14,626	1	16,418
Canada	0.5	8,831	0.5	5,839	1	14,505
French Polynesia	0	414	0	178	0.1	953
Vietnam	5	45,117	1	13,290	0	0
China	27	523,941	0	0	0	0
Korea	3	53,035	0	0	0	0
Pacific Islands	0	51	0	0	0	0
Total	264	$4,124,911	269	$3,880,570	305	$4,225,933
% change (Yr/Yr)	4%	12%	2%	-6%	14%	9%

Source: Statistics New Zealand

 

6.1.3  Barriers to kiwifruit exports

Cost of tariffs in leading markets

Significant tariffs exist in several major kiwifruit export markets including Korea where the 15% tariff resulted in costs of $13.7 million in 2018. Kiwifruit exports to Korea represent 4.9% ($92m of $1.858 billion exported) of New Zealand's export value but 16% ($13.7m of the $85m in tariffs) of total tariffs paid. This tariff is being phased out to zero in 2020. The European Union tariff of 8-8.8% resulted in costs of $34.7 million; Chile, in contrast, pays no tariff on kiwifruit exported to the EU. Japan's 6.4% tariff was $25 million in 2018. The $85.1 million estimated cost of tariffs in 2018 equates to $31,753 per kiwifruit grower.

Table 6.1.4: Cost of kiwifruit tariffs (based on 2018 FOB value)

Country	Tariff rate	Value of exports (NZ$ FOB)	Estimated cost of tariff ($)
European Union	8-8.8%	511,287,055	40,902,964
China	0%	457,159,330	0
Japan	6.4%	396,703,399	25,389,018
Taiwan	0%	137,711,850	0
Korea, Republic of	15%	91,591,502	13,738,725
United States of America	0%	65,637,899	0
Australia	0%	42,383,802	0
Hong Kong	0%	29,129,510	0
India	30%	16,139,068	4,841,720
Singapore	0%	15,517,921	0
Canada	0%	14,196,861	0
Vietnam	0%	12,651,264	0
Malaysia	0%	10,543,035	0
Indonesia	0%	9,943,090	0
Thailand	0%	7,209,883	0
United Arab Emirates	0%	6,487,963	0
Mexico	0%	4,689,192	0
Philippines	0%	2,904,294	0
Kuwait	0%	2,004,743	0
Russia	0%	1,937,696	0
New Caledonia	25%	764,022	191,006
French Polynesia	8%	707,525	56,602
Fiji	5%	198,693	9,935
Total	4.6%	$1,837,300,904	$85,129,970

Under the CPTPP, the 6.4% tariff into Japan will be eliminated on entry into force on 30 December 2018. Based on the above trade profile, this will eliminate almost 30% of the total annual tariff cost for the NZ kiwifruit export sector. A free trade agreement negotiation with India commenced in 2010 however the timeframe for completion of these negotiations is not clear. Under the New Zealand-China Free Trade Agreement the kiwifruit tariff has been zero since 2016

Chile is a competing Southern Hemisphere supplier and has negotiated free trade agreements with 12 countries including China, Korea, Japan, the USA, Mexico, MERCOSUR countries (Brazil, Argentina, Paraguay, and Uruguay), and the European Union. There are concerns that the trade advantage enjoyed by Chile will reduce prices in these markets and make it more difficult for New Zealand to compete.

European Union – The tariff on kiwifruit (8-8.8%) is one of the higher single tariffs for New Zealand exports to the EU, costing just under $41 million in 2018 (based on FOB value, or $65m based on CIF).

 

Table 6.1.5: Cost of kiwiberry tariffs (based on 2018 FOB value)

Country	Tariff rate	Value of exports (NZ$ FOB)	Estimated cost of tariff ($)
Australia	0%	1,627,279	0
Taiwan	11.3%	835,526	94,414
United States of America	2%	651,030	14,323
Japan	6%	405,011	24,301
Hong Kong	0%	355,214	0
Singapore	0%	104,740	0
Thailand	0%	57,922	0
Malaysia	0%	56,574	0
India	30%	49,055	14,717
European Union	9%	35,151	3,164
Indonesia	4%	16,555	662
United Arab Emirates	0%	16,418	0
Canada	0%	14,505	0
French Polynesia	8%	953	76
Total	3.5%	4,225,933	151,656

 

Taiwan’s 11.3% tariff on Kiwiberries was responsible for 62% of the overall cost of tariffs on kiwiberry exports. Under the ANZTEC economic cooperation agreement with Taiwan, this will phase out to 0 in 2021. Under the CPTPP, the 6% tariff into Japan will be eliminated from 30 December 2018.

 

SPS market access barriers

Phytosanitary import regulations have been established that allow kiwifruit to be exported to around 60 countries, generally with very few phytosanitary barriers. 

Australia – Like many other industries kiwifruit exporters participate in the offshore pre-shipment inspection (OPI) programme to reduce the risk of clearance failure on arrival in Australia.  However, in 2016 Australia announced that it is seeking an incremental wind-down of the OPI programme due to concerns over the number of its inspectors based offshore (despite the inspectors costs being funded by the exporting country).  The last year of OPI inspections is likely to be 2019, with a greatly reduced number of inspectors available. The OPI programme is very important for trade facilitation and a withdrawal of the programme is concerning. Increased scrutiny of pests at the border and fewer identifications of pests of biosecurity concern to a species level, means the number of fumigations of non-precleared imports is increasing. The Australian authorities are requesting pest free fruit, however many pests of kiwifruit are not of quarantine concern to Australia. Another worrying point is the classification of common pests as quarantine because they may be a vector of disease.

China – During 2016, the Chinese authorities issued a notification regarding a find of the fungus Neofabraea actinidiae on an extremely small volume of kiwifruit exported from New Zealand. N. actinidiae is a fungus that can be implicated in the development of ripe rots in mature fruit after a period in coolstore and has no food safety implications. Zespri and the post-harvest industry introduced significant additional pre-export checking procedures, approved by the Ministry for Primary Industries to reduce the total number of rots arriving in China. Subsequently, export of kiwifruit continued to clear as normal into China and sales were expected to exceed record volumes for the China market. The additional checking procedures are expensive to implement. Rots caused by N. actinidiae are very uncommon although the organism may be associated with other rots and the organism may be present as a latent infection.

 

China - (Kiwiberries) - (Actinidia arguta).  In 2016 China reviewed the list of crops permitted entry to China and added the scientific names associated with the importable commodities.  Kiwiberry had previously been classed as “kiwifruit” and had entered on this basis for several years. However, in the review China considered that Actinidia arguta was not part of the kiwifruit group and kiwiberry was excluded from the list of enterable crops.  Work is still underway to re-open access.

 

Indonesia – Kiwifruit is not subject to the same restrictions as some other fruit and vegetable products for Indonesia. However, there is ongoing uncertainty with regard to Indonesia’s regulatory system. Indonesia granted New Zealand “country recognition” for its food safety systems in December 2014. The renewal of the agreement was confirmed in February 2018. New import licencing requirements have been introduced which may further complicate access to Indonesia.

Iran – Requirements include compulsory fumigation with methyl bromide in New Zealand. Due to transit times and unknown arrival conditions this currently poses an unacceptable risk to fruit quality.

Japan – Japan operates a system of listing non-quarantine pests, which means that if a pest occurs in Japan but is not on that list it is still considered to be a quarantine pest. The NZ Ministry for Primary Industries (MPI) has made positive progress in negotiating for the expansion of the non-quarantine pest list, but fumigations still persist.

Korea - Recent regulations on residue testing upon arrival are significant. These are exacerbated by frequent MRL revisions which mean each supplier or post—harvest operator needs to be re-tested with each change.

Mexico – Fuller’s rose weevil is categorised as a quarantine pest even though records show that it is present in Mexico. Mexico has stated that the only sightings were a number of years previously and that no further sightings have occurred.

Thailand – Thailand’s import conditions for kiwifruit, which were implemented in October 2015, appear simple on paper but the verification is difficult and is limiting the ability to supply this market. In particular, they require an Integrated Fruit Production (IFP) system for controlling the actionable pests on each orchard. IFP systems are not designed to prove control measures but Thailand requires this. Updated labelling requirements in 2018 require pallets to be identified with shipping marks.

Israel - Israel includes Phomopsis sp as actionable rot. This is a cosmopolitan genus that can be present as a secondary rot. The genus is very complex and accurate species identification is difficult. As a result, several shipments of New Zealand fruit have been rejected at the border for what New Zealand regards as a rot associated with over ripe or damaged fruit. There have been no further interceptions since 2014, however we maintain a programme of a reduced shipping window to reduce risk.  This compromises the ability to serve the market.

Jordan – A change to import permits for the 2016 season means that NZ kiwifruit no longer has access to Jordan.  The new requirement asks for an additional declaration that the consignment should be free of any bacteria of Pseudomonas syringae pv. syringae.  Kiwifruit is a well-known host of this common bacterial blast and Zespri has not pursued a case via MPI about this, as it seems to be targeted only to NZ kiwifruit because there is no such requirement for exports from Europe, where this bacteria is also present. 

Labelling – There are international guidelines regarding labelling but Korea, Brazil, India, Malaysia, Qatar, Russia, Vietnam and Argentina all have additional label requirements for application pre-export.