New Zealand’s cherry industry has fallen short of its export potential in recent seasons with rains damaging crops just before harvest, but new investments in protection systems look set to bring more stability to the sector.
Summerfruit New Zealand chief executive officer Marie Dawkins told www.freshfruitportal.com the industry was hoping for exports between 2,5000-3,000 metric tons (MT) last season, but wet weather between Christmas and Jan. 9 soaked the figure down to 1,644MT.
“You’ve got two problems with the rain – one is that the fruit goes soft and that is just a no-no, apart from that they don’t travel well. The top quality Asia is looking for is in crunchy cherries, they’ve got to be firm,” she said.
“The other thing that of course happens is you’ll get split fruit and you start getting disease. It’s a high risk crop.”
Despite a string of difficult years, she said growers were optimists and had been planting new crops and investing in new practices.
“There have been new plantings and I expect we’ll start seeing some of those plantings coming through in the next few years,” she said.
“The shift that is occurring – though that probably won’t have an impact this year but in coming years – is that you’ve got growers moving towards growing cherries on structures and they tend to have a bit of cover on them…that in itself will help protect against the rain in future years.”
RD8 export manager Dean Astill echoed Dawkins comments, emphasizing that while it wasn’t always easy for growers to access the funding necessary for these investments, the industry was looking for more “surety” in its bid to make the most of rising Asian demand.
“With new growing systems for the trees it makes it a little easier and manageable in terms of cost to cover those new plantings under that system,” he said.
“I think a lot of growers just want to put some more certainty back into their business, and protecting from the elements is one way of doing that. I don’t think you can fully protect from the elements as it’s not wrapped in a glasshouse, but rain covers are certainly something that can be used to mitigate that risk.”
Dawkins added that fruit losses were not across the board due to rain, as some producers in the main Central Otago growing region had earlier varieties, while Blenheim farms tended to avoid the wet weather. However, as a wine-growing region most new plantings in this dry area tended to be dedicated to grapes rather than cherries.
Growing Asian markets
Taiwan continues to be New Zealand’s biggest cherry export market with 623MT sent to the country last year, but neighboring China continues to increase its share of purchases.
“China as a market for cherries has just come out of the water. Back in 2009-10 we sent 5.5% of our cherries to China, and last year 21% went there,” Dawkins said, adding this made it the second-biggest market – a position that used to belong to Thailand.
“There has been a corresponding reduction in the fruit going to Hong Kong, as you can imagine as the gray market closes there, but the increase has been greater towards China than was ever in Hong Kong.
“It’s certainly looked upon as a potential growth market but at the moment it’s holding prices pretty well. Whether it will continue to do that is a bit of an unknown.”
She said other parts of Asia have also been drivers of growth, including markets such as Thailand, Singapore, Malaysia and Vietnam.
“It’s probably been pull marketing to some degree, we haven’t had to push into there, but of course you’ve got to supply quality,” she said.
While Chinese demand continues to grow, the industry leader believes long-term trade relationships with Taiwan mean it would be difficult for China to take the number one spot.
“I’d be surprised if that happened quickly, simply because Taiwan has been our big market for so long. It is a big focus and it would take a big shift in relationships for Taiwan to fall from its current position as our main market, Dawkins said.
“For instance, if we did have a big crop this year it’d probably be Taiwan that would take the volume because Taiwan is the market where we have the strongest relationships where we’d be able to expand with a bigger volume.
“The price is reasonably stable there but I don’t think you could guarantee that in China.”
She added that unlike suppliers like Chile, New Zealand’s cherry focus was on large-sized fruit in small volumes. In the same vein, Astill said this meant growers were not so much banking on concentrated high-price periods but strong prices throughout the deal.
“We certainly get more market pull on festival occasions but because we’re after that premium price from day one we try to sell consistently all the way through from start to finish,” Astill said.
“It’s becoming more important for us as an industry to have customers identify that with New Zealand cherries they have to take them from day one to day dot. That’s not necessarily coming in boat loads of 40-foot containers, but via airfreight.”
China Airlines routes in the works
Dawkins said this was another important issue, as if New Zealand finally gets its bumper crop this year or next, it will need to find the capacity to export such a large volume of fruit.
“We have limited freight options. We’re not a hub – freight comes here, we’re at the end of the line you might say, whereas Sydney is a hub for other markets. So freight will possibly be an issue for us if we do manage to pack that big crop,” she said.
Astill said the main logistical hub for South Island cherries was Christchurch, although the industry did utilize Auckland International Airport as well.
“It depends on the airline and the market. Some are direct and some aren’t, some will go via a third party country. For example Sydney is a reasonable hub. You might go to Singapore and then on to Korea or Thailand or anything like that.”
He said China Airlines was going to add new routes to Asia from New Zealand, but the details were yet to be determined.
“China Airlines coming to New Zealand certainly helps for cargo uplift out of Christchurch – they’re looking at running a service out of the three days a week,” he said.
“We understand that the cherry industry is there for six to eight weeks and they won’t be giving 100% of that cargo to the cherry industry.
“I don’t think it’s direct to China – it would probably give us extra capacity to the likes of Taipei. Just because it’s China Airlines doesn’t mean it flies direct to China.”
While the two countries’ received volumes are not large enough to rate a mention on Summerfruit NZ statistics, India and Indonesia are two countries that some exporters are looking to for new opportunities, including RD8 and Valley Fresh Direct NZ.
“Growth has been incredible in any of the Asian markets. We’re seeing a little bit go to India and Indonesia too, and who knows where that might take us in the coming years,” said VF Direct’s Anton Masutti.
“They’ve been pretty much non-existent. The dam’s just opening a little bit.”
Astill has also been looking at these two countries, but Indonesia’s regulations have been challenging.
“There have been a few hundred kilos shipped to India over the past couple of seasons so that’s certainly on our radar, and we have access to that market,” he said.
“Another market we’re looking at is Indonesia, but some market access protocols have made that and that’s being revisited all the time. It could be a very viable market in the future.”
Masutti said he would also be looking for opportunities in Russia now that Australia has been barred from that market under recent sanctions, but Astill did not believe Australia’s absence would have a huge impact.
“We’ve always done small shipments to Russia so we’ll probably continue. I don’t know if it will provide us with wonderful additional opportunity, but I haven’t heard too many noises out of Russia at this stage,” Astill said.
Dawkins urged any growers wishing to export cherries to Russia investigate the country’s maximum residue limits (MRLs) soon.
“They can’t just suddenly decide to send to Russia come January because they’ve got too much fruit; they’ve got to be thinking about that now with regards to what agrichemicals they might be using and meeting Russia’s import requirements,” she said.
“I think you’ll find that certainly people will see opportunities in Russia. I think perhaps Russia might not be the easiest of markets – you’d want to be wary rushing in there.
“There could be some different systems in what people are used to dealing with, different ways of securing payment and everything else. But I think our exporters will certainly be looking at cherries into Russia.”