Future predictions are optimistic
New Zealand’s kiwifruit industry is facing challenges due to rising orchard costs, adverse weather conditions and economic hardship. However, the sector’s fundamentals are now showing signs of improvement. Colliers Rural Valuation’s report, authored by Chris Boyd and Brylie Gordon, utilizes discounted cash flow methodology for forward-looking valuation of the Kiwifruit real estate market, along with direct market comparisons. This analysis shows that sales activity and value will decline from late 2021 following a peak in early 2022 due to the aforementioned challenges.
Despite the 2023 crop being reduced due to poor growing conditions, the industry is seeing higher return prices per tray due to supply shortages. Future forecasts are more optimistic, with yields expected to increase in 2024. Boyd said orchards sold in late 2022 and early 2023 traded at lower prices than at the peak of the market. He points out that there is a difference in the expected value of buyers and sellers, which is leading to a decline in sales volume. However, market sentiment is improving with expectations for a bumper crop ahead of the 2024 harvest, which could lead to increased trading.
New Zealand’s Bay of Plenty region is the largest producer of kiwifruit, with Te Puke being the main region. Kiwifruit exports reached $2.9 billion in the year to June 2022, with the European Union, China and Japan being key markets. Since the release of the first SunGold license in 2016, the area under kiwifruit cultivation has increased from 12,180 hectares in 2015 to 14,682 hectares in 2023.
Source: oneroof.co.nz
