Almost 185 hectares of apple orchards in Nelson and Hawke's Bay have been partially destroyed by a faulty crop spray - 1.8 percent of the total apples grown annually in New Zealand.
The spray, Mancozeb which is used by around 20 apple growers, has been recalled after it was discovered it contains Azoxystrobin - a damaging crop fungicide.
Azoxystrobin is known to cause cosmetic damage to Royal Gala apples, but the damage does not affect the safety of the food.
The product was recalled by Adama New Zealand when a grower in Hawke's Bay found blemishes on some of its apples.
Adama NZ CEO David MacGibbon said "This is not a product we manufacture ourselves. Mancozeb has been a widely used product in spring for apple growers since we started selling it 10 years ago."
He said there have never been issues with the product before, however they will no longer be selling the product.
Mr MacGibbon is "devastated" by the damage that growers have suffered.
"Growers are like family to us, many of us have known each other for decades. Over the coming months towards harvest, Adama New Zealand will continue to run residue tests on all apple trees where the product has been used and will further support growers."
A NZ Apple and Pears spokesperson said they are "quite confident" that insurance will cover any financial impact for growers.