WELLINGTON, New Zealand (AP) — New Zealand has suspended its lucrative kiwifruit exports to China after authorities there say that on some shipments they found a type of fungus that can cause the fruit to rot.
Kiwifruit exporter Zespri said in a statement Friday it hopes to have new pre-shipping protocols in place within days so it can resume exports.
The development comes at a sensitive time in trade relations. China has been accused by countries around the world of flooding markets with cheap steel.
New Zealand Trade Minister Todd McClay said last month he had been made aware of reports claiming China could take retaliatory trade action if New Zealand investigated allegations of steel dumping there.
McClay said he had sought and received assurances from the Chinese government that the issue would not impact trade between the countries.
Zespri was one of the companies to pass along the reports to the New Zealand government. Zespri said its local staff in China had been approached by an industry body in early July with "unsubstantiated information" about trade.
But Zespri spokeswoman Rachel Lynch said Friday it was treating the fungus issue as a normal market-access issue and was not connecting it to the steel issue.
China's General Administration for Quality Supervision, Inspection and Quarantine said the Tianjin and Shanghai bureaus had seized New Zealand kiwifruit containing the Neofabraea actinidiae fungus on three occasions.
"It causes serious economic loss," the agency wrote. "Currently, this country bans distribution."
New Zealand has a more benign view of the fungus. Zespri said that while it causes the fruit to rot, it has no food-safety implications. Lynch said the fungus has been found in New Zealand kiwifruit for two decades and has been assessed as having a low economic impact.
Nevertheless, Zespri hopes the new protocols will help eliminate the fungus.
In the year to June, New Zealand kiwifruit exports brought in a record 1.7 billion New Zealand dollars ($1.2 billion).
Lynch said Zespri exports about 24 million trays of kiwifruit to China each year, worth about NZ$500 million. She said that since the fungus discovery, it has decided to reallocate 1 million trays to other customers.
Zespri is New Zealand's sole authorized exporter of kiwifruit to China, although other companies can export there under collaborative agreements.
AP Business Writer Joe McDonald in Beijing contributed.