The soaring exchange rate is on the minds of apple growers attending their annual conference in Havelock North today, but pleas to the Government to do something to ease the industry’s crippling burden have fallen on deaf ears.
Pipfruit New Zealand chairman Ian Palmer says the industry is unviable with the kiwi dollar at US87c. "It prevents us being competitive in international markets, and that’s a shame because our fruit is selling well."
But Trade Minister Tim Groser told the growers they had to face the "brutal realism" of such a high rate.
He rejected suggestions of fixing the rate to a major currency or charging a fee for financial transactions leaving and entering the country.
The system of floating the kiwi dollar was superior to any other. "We have tried other alternatives and they were all much, much worse."
He gave the example of Greece, which was "trapped" to a fixed exchange rate and was paying for that with massive unemployment, company failures and debt defaults.
The industry’s best option was to do more to develop the Asia-Pacific market, he said. "It’s staring you in the face."
Australia, which lost its appeal against the World Trade Organisation decision to back the entry of New Zealand apples, would soon open its market, despite political rumblings. "They don’t have a choice," he said. "No country has not implemented an appellate body decision. For Australia not to do that is inconceivable."
Other apple market prospects:
China: Exports through the "grey" Hong Kong market had lifted 124 per cent in value in the past year and doubled in volume. Tariffs would disappear next year, while the rest of the world still had to pay 20 per cent. "It gives us a massive advantage, but we have to negotiate a protocol to go through official channels and we’re making good progress there." Worry over a codling moth incursion was the biggest barrier.
India: "Major, major" negotiations were making "some" progress, Mr Groser said.
Taiwan: Importers had to be assured of sophisticated management of codling moth in New Zealand orchards.
Korea: Codling moth was also a stumbling block and free trade negotiations were making slow progress.
Russia: "Intriguing" negotiations on free trade were "going really well" and he was confident of an agreement.
Mr Palmer said the export season, currently at its midway point, was proving a success so far.
Sales in Europe and Britain were going well, helped by there being no domestic fruit in the market because of drought. Asia was strong, particularly China and India, where volumes were up 50 per cent despite a 47 per cent tariff.
The United States was "hot", but with the US dollar so high no apple producing country could afford to supply it.