The kiwifruit sector is predicting lower profits this year, as yields drop and shipping costs continue to climb.
File photo. Photo: RNZ / Angus Dreaver
Kiwifruit marketer Zespri has sent out an update to growers which shows a decent drop in profit is expected this year.
Last year Zespri made a record $361.5 million, but this year that is expected to drop to between $227m and $247m.
Company spokesperson Carol Ward said it had been a difficult season.
"Last year was such a record year for us, but this year we released less [sic] licences available to our growers and we've also got a slightly smaller crop.
"So, that has meant that our profit forecast for the year is down."
Ward said growers should still get good returns this season, despite the dip.
"The main thing that we're focused on with our growers is the OGR (Orchard Gate Return), which is about the returns that the fruit that they are producing delivers through to them," she said.
"And this year, we're saying that there will be a solid return, we're doing as best as we can to return the value through to our growers, recognising the challenges that we're facing here, and the shipping disruptions with Covid-19, and the continuing labour shortage issue that we have that we've been looking into as an industry."
Ward said the cost of shipping was continuing to rise and even though Zespri chartered its ships, it was not exempt from the increases.
The country's largest kiwifruit grower Seeka has also lowered its market guidance.
The grower said the harvest is now complete and total volumes of green kiwifruit are down about 17 percent on last year and gold kiwifruit yields are down by about 10 percent.
Due to the lower volumes, Seeka expects full-year net profit before tax to be between $9m and $11m.
