A quantitative analysis of trade-related issues in the global kiwifruit industry

New Zealand is currently the third largest global producer of kiwifruit and thus plays an important role in the international market. Exports of kiwifruit are also of significant horticultural value for New Zealand and in 2007 the kiwifruit industry accounted for export values of NZ$790 million. The global kiwifruit market has experienced substantial changes in recent years and is likely to change significantly in the near future due to developments in production sources, adjustments to trade policy settings and shifts in consumer preferences. The New Zealand kiwifruit industry needs to consider what the impacts of these changes might be so that future strategies can be constructed effectively. Little quantitative modelling has been done in New Zealand to consider the impacts of changes to the global kiwifruit industry. The major contribution of this research was the development and calibration of a kiwifruit industry-specific partial equilibrium trade model. The model was then used to examine the impacts on New Zealand producers of these trade-related changes in the global kiwifruit market. Three relevant scenarios were developed for this purpose. They include a drop in EU demand through the introduction of a stricter Sanitary and Phytosanitary policy, an expansion of the Chinese kiwifruit industry where production is doubled by year 2013 and finally a trade liberalisation scenario where current import tariffs on kiwifruit were removed worldwide. It is clearly observed, through both the Chinese expansion scenario and the trade liberalisation scenario, what a potential impact and future role China has as a world market player. Increased availability of Chinese kiwifruit appears to affect New Zealand producer returns and exported quantities negatively, albeit not as significantly as the EU introduction of an SPS policy. A trade liberalisation scenario, on the other hand, proves to increase New Zealand grower returns significantly for all varieties.