SunGold licenses in great demand

Tue 14/07/2020 by Richard Wilkinson
SunGold licenses in great demand

Demand among New Zealand producers to produce SunGold kiwifruit continues to surge. Farmers Weekly reports that once again, the annual offering of 700ha of new licences for producing SunGold was oversubscribed, with bids totalling 1,660ha, reflecting the ongoing optimism among growers about SunGold’s value and prospects. At NZ$400,000/ha, SunGold is the most valuable fruit license, with the next being Envy apples at around $100,000/ha. Licence income has now become an integral part of Zespri’s non-fruit earnings, accounting for $211 million, or 6% of company revenue.

Large-scale operators appear to be seeking a piece of the action. For the first time, several firms bid for over 20 hectares. Six bidders sought over 20ha, three bid for 15-20ha, and five were in the 5-10ha range. The average size of the successful bids was 2.4ha, representing a continuing gradual rise in average licence area bids from 1.5ha in 2016. Last season SunGold fruit averaged $11.86 a tray or $160,000/ha average return before costs.

Organic SunGold also continued to reflect increasing competition for growing the fruit, with the 50ha allocated averaging $219,600/ha, up from $153,000/ha last year. This year also marked the first time the Red variety was available for commercial orchards, with 150ha allocated for bidders. The round averaged $62,000/ha and again was oversubscribed, in this case by 110ha. This year, Red sales have been limited to domestic supply, and exports to Singapore and Japan.

Zespri announced a profit of $200.8 million for 2019-20.

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