Zespri Halts Kiwifruit Exports to China After Fungus Discovery

Zespri Group, New Zealand’s biggest kiwifruit exporter, has temporarily suspended exports to China after officials there found a fungal infection in some fruit.

China’s General Administration of Quality Supervision, Inspection and Quarantine issued a risk notification last week specifying more stringent inspection and quarantine processes on New Zealand kiwifruit entering Chinese ports, Zespri said in a statement Friday. The notification also requires strengthened pre-shipping processes and Zespri has halted shipments until new checking protocols are in place, it said.

China is a key market for Zespri, helping kiwifruit exports surge 41 percent to a record NZ$1.7 billion ($1.2 billion) in the year through June and offsetting lower earnings from other New Zealand exports such as dairy. Last month, the company rejected reports that it may face obstacles in China in retaliation for any New Zealand government scrutiny of alleged Chinese steel dumping.

“All indications are that AQSIQ is treating this as a normal market access issue,” Zespri said today. The fungus doesn’t occur on Chinese kiwifruit and “authorities are taking reasonable measures to mitigate any risk this may pose to the Chinese kiwifruit industry,” it said.

Zespri “continues to work with Chinese officials and the New Zealand government to mitigate any potential risk to China, along with any market access impact to New Zealand,” it said.

‘Absolute Assurance’

Zespri expects to have the improved protocols in place within days after approval from New Zealand’s Ministry for Primary Industries, at which point it plans to resume exports to China, it said. It has reallocated 1 million trays earmarked for China to other markets, but still plans to sell another 7 million trays there this season.

The fungus was found through routine testing of four containers of fruit which arrived at Tianjin port in early June, Zespri said. It causes fruit rot and has no food safety implications. It typically affects a tiny fraction of the 135 million trays being shipped in 2016.

Prime Minister John Key has said that China’s Ambassador to New Zealand has given an “absolute assurance” there won’t be any trade reprisals from an investigation into alleged steel dumping. While there have been reports of a complaint, the government hasn’t launched an investigation yet.

Before it's here, it's on the Bloomberg Terminal.