Australian citrus exports:Past, present and future

David DanielsMarket Access Manager, Citrus Australia

Industry snapshot

• 1 500 growers on 25 000 hectares

• Produce close to 700-750 000 tonnes pa.

• 28% of businesses = 79% of area

• 1/3 juice, 1/3 domestic fresh, 1/3 export

• Exports to over 50 destinations

• Export volume (2017) – 272 000 tonnes

• Export value (2017) $A462 million

Australian citrus

• Attracts high premium O/S

• Renowned for excellent colour

• Renowned for sweetness

• Clean, green image

• Reputation for safety

Why Australian citrus ?

The past

1970s – 1980s

• Focus on domestic market• Focus on domestic juice market• Large plantings of Valencia

oranges• Niche export opportunities• Removal of tariffs • Entry of imported juice • Declining returns for juice

The past

1990s – exports

• Access to USA for South Australia (1992)• Formation of Riversun Export Pty Ltd• Increase in navel plantings• Access for NSW and Vic. (1996)• Access to Japan• Heavy focus on USA market through

Riversun

The rise and fall of the USA market

1990s – early 2000s

• Riversun - 24 exporting shareholders• Coordinated shipping• Strict quality control (officers in regions)• Efficiency – full reefer vessels• Consistency of quality• Reliability • Assisted promotions at other end• Maximise returns

The rise and fall of the USA market

The first signs of success !!

• No southern hemisphere competition

• Favourable exchange rates• Single exporter• Single importer• Competitive rates for freight• Fruit Fly Pest Free Areas recognised

The rise and fall of the USA market

0

5

10

15

20

25

30

35

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

X 1

00

0 t

on

nes

Australian citrus exports to USA (x1000 tonnes)

The rise and fall of the USA market

0

5

10

15

20

25

30

35

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

X 1

00

0 t

on

nes

Australian citrus exports to USA (x1000 tonnes)

0.65 0.50 –0.55

0.75 –0.80

0.85 –0.95

0.95 –1.00

1.10

The rise and fall of the USA market

0

5

10

15

20

25

30

35

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

X 1

00

0 t

on

nes

Australian citrus exports to USA (x1000 tonnes)

0.95 –1.00

1.10

South Africa(1997)

Chile(2009)

The rise and fall of the USA market

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013 2014 2015 2016

x 1

00

0 t

on

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s

Chilean orange exports to USA (x 1000 tonnes)

The rise of Japan

0

5

10

15

20

25

30

35

40

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

x 1

00

0 t

on

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s

Citrus exports to Japan from Chile and Australia (x 1000 tonnes)

Aust

Chile

The rise and fall of the USA market

0

20

40

60

80

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

x 1

00

0 t

on

ne

s

Chilean orange exports to USA and Japan (x 1000 tonnes)

Japan

USA

The rise and fall of the USA market

2011 – facing reality

• Success in USA is fading• Chile very competitive• $A at parity with $US (or worse)• Still recovering from drought• Heavy ‘on’ crop of small fruit• Poor returns for juice• Large plantings of navels (for USA)

but• Showing some positive signs in Asia

The present – a focus on Asia

A focus on Asia

• Healthy GDP growth

• Rapidly expanding middle class

• Populations moving into the cities

• Don’t trust their own food supplies

• Imported food seen as luxury item

The present

2017

• Citrus exports 273 000 tonnes (+20%)

• Value A$462 million (+32%)

• China 70 000 tonnes (+78%)

• Japan 42 000 tonnes (+14%)

• Hong Kong 31 000 tonnes (+5%)

Snapshot

Oranges197 000 tonnes (+18%)$A298 million

Mandarins70 000 tonnes (+23%)$A144 million

4 400 tonnes$A10-12 millionLemonsLimesGrapefruit

2017 citrus exports

0

10000

20000

30000

40000

50000

60000

70000

80000

Ton

ne

s

91%

2017 citrus exports

0

10000

20000

30000

40000

50000

60000

70000

80000

Ton

ne

s

+ 14%

+ 5%

+ 11%+ 9%

+13%

- 11%

-28%+23%

-35%+23%

+19%

-14%

+340%

+ 78%

2017 orange exports

0

10000

20000

30000

40000

50000

60000

Ton

ne

s

+ 56%

+ 11%

-3%

13%-7% -29% +3%

+446%

-18% -14% -4% 150%

The present – Australian citrus exports to China

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2012 2013 2014 2015 2016 2017

Ton

ne

s

Not an overnight success

China

• Access since 2006

• Little trade until 2013

• Difficult quarantine conditions

• Challenging market conditions

• Critical support needed

Not an overnight success

Critical support: instructional material

• Pest and disease monitoring

• Cultural practices

• Pest control measure

• Packing-house procedures

China - not an overnight success

Critical support

• Online training for crop monitors

Not an overnight success

Critical support

• Online export registration system

• 550 growers

• 80 packing houses

• 8 500 hectares

Not an overnight success

Critical support: market intelligence

• Crop estimates committees, fruit density and frame counts

• Crop forecasting

• Weekly shipping volumes

• Relationships with southern hemisphere competitors

• Online tree census

Mandarin forecast

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2017 2022 2027

Afourer Murcott

121,218

151,522

175,312

Mandarin Production Forecast (Afourer & Murcott)

Me

tric

to

nn

es

57,512 57,691 59,998

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2017 2022 2027

Met

ric

ton

nes

Year

Early Navel Production Forecast

Navel Orange: Early Varieties

Navel Orange: Mid Varieties

96,866 79,613

69,168

-

20,000

40,000

60,000

80,000

100,000

120,000

2017 2022 2027

Met

ric

ton

ne

s

Year

Mid Navel Production Forecast

Navel Orange: Late Varieties

130,282 126,671 118,073

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2017 2022 2027

Late Navel Production Forecast

Me

tric

to

nn

es

Not an overnight success

Critical support: trade development

• Exporter groups

• Trade seminars

• In market activities

Not an overnight success

Critical support: quality improvement

• Sensory evaluation

• Quality standards

• Maturity testing & prediction

• Pass to pick program

• Sweeter citrus program

• Ultra-low residue concept

Critical support:

• agrichemical management

• agrichemical access

• MRL advice

Agrichemical residue monitoring and compliance

Not an overnight success

Critical support: food safety

Disappointments

• South Korea

• Indonesia

• United States

• Japan

• Thailand

Risks

• Phytosanitary breaches

• MRL violations

• Food safety risks

• Political risks

• Currency fluctuations

Take home messages

• Quality, quality, quality

• Grow to market requirements

• Anyone can sell the scotch fillet

• Cooperation between businesses

• Success is difficult to predict

• Have a sense of humor

Thank You