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Horticulture values on the up

Thursday, 3 March 2016 | Posted in Global Trade by Renee Harrison

Trade deals and a weaker Australian dollar have been credited with the positive forecasts projected for Australia's horticulture industries. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)'s Outlook 2016 agricultural commodities report released today shows strong potential for further sector growth on the back solid 2014-2015 figures.

There are few forecasts within the report that fruit, vegetable and nut producers would sigh at, with the report painting a glowing future for the horticulture sector. The gross value of horticultural production is expected to increase from $9.3 billion in 2014–15 to $10.2 billion in 2020–21. Exports of horticultural products are expected to expand from $1.1 billion in 2014–15 to $2.2 billion in 2020–21.

While Australia may be set to send more overseas, it also seems poised to import more. In recent years about 30 per cent of horticultural imports by value have been fresh produce, with the remaining 70pc processed. However, around 80pc of Australia’s horticultural exports are fresh produce. Since 2003–04 the total value of imports of horticultural products has exceeded the value of exports, and the gap has widened over time. In 2014–15 total fruit, nut and vegetable imports were valued at $2.7 billion, $834 million more than the value of exports.

It's a different story for the fresh sector specifically though, with the value of fresh horticultural exports continuing to exceed the value of fresh imports. Fresh horticultural exports were valued at $1.1 billion, twice the value of fresh imports. ABARES reports both exports and imports of fresh horticultural produce are expected to grow in the medium term, with the value of exports exceeding the value of imports.

Nudging this export growth along was a weakened Australian dollar in the three years to 2015-2016. The assumed low value of the Australian dollar is expected to support a projected rise in the value of horticultural exports over the medium term (to 2020–21). "New trade agreements with China, Japan and the Republic of Korea have resulted in reduced import tariffs on several Australian horticultural products, and further reductions are scheduled over the coming years," the ABARES report said. "The Trans-Pacific Partnership Agreement, once it comes into effect, is expected to provide further trade benefits to Australian horticultural exports."

One of the determining factors as to exactly how much horticulture expansion takes place is water availability which ABARES said will "continue to be a major factor affecting horticultural production over the years to come. The Bureau of Meteorology’s current outlook for the next few months is for average to above average rainfall in much of eastern Australia, so horticultural production in the remainder of 2015–16 is not likely to be constrained," the report said.

"The gross value of horticultural production is expected to increase from $9.3 billion in 2014–15 to $10.2 billion in 2020–21" - ABARES Outlook 2016

Australia's ability to tap into counter-seasonal demand for its products will be key to further industry development, according to ABARES. Breaking it down, the gross value of Australian fruit and nut production, excluding wine grapes, is forecast at around $3.7 billion in 2015–16. This follows a rise from the low of $3.2 billion in 2013–14 to $3.5 billion in 2014–15.

The overall value of Australian vegetable production increased from $3.2 billion in 2000–01 to $3.6 billion in 2013–14. "Capsicum, mushroom, sweet corn and zucchini production contributed most to this increase, while the real value of carrot, potato, cabbage and lettuce production declined," ABARES said. "Vegetable production is projected to continue to expand to meet domestic market requirements, and some increase in export demand, to reach $4.2 billion by 2020–21."

Strong competition in both the fresh and processed arenas from other countries in recent years has seen a significant slide in vegetable exports however. Where in 2000-2001 they drew some $478 million, that slipped back to $278 million in 2012–13. Exports increased to $299 million in 2014–15.

Vegetable exports have shown further vigour in the first half of 2015–16 with the value of vegetable exports projected to increase by 10pc to $325 million and to increase steadily to around $350 million in 2020–21. Almost 60pc of Australia’s vegetable exports in 2014–15 were fresh. Carrots, potatoes, onions, asparagus and vegetable seeds contributed most to the value of vegetable exports in 2014–15. New Zealand, Japan, Singapore and the United Arab Emirates were the major destinations. Vegetable imports increased to $962 million in 2014–15, a whopping 80pc more than in 2000–01. New Zealand provided 20pc of Australia’s vegetable imports in 2014–15.

The value of fresh vegetable exports in 2014–15 was $173 million, more than twice that of fresh vegetable imports. In 2014–15 asparagus was Australia’s largest fresh vegetable import and the second-largest fresh vegetable export. 

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Article writen by Ashley Walmsley, Good Fruit and Vegetables
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Development Grants for Agriculture Sector Women 

Wednesday, 2 March 2016 | Posted in Industry Talent by Renee Harrison

In 2016 Women & Leadership Australia is administering a national initiative to support the development of female leaders across the agriculture sector.

Due to an unprecedented response to the 2016 National Industry Scholarship Grant Initiative to support the development of women's leadership in the Agriculture sector, the National Scholarship Grant Committee have made the decision to provision further funding and extend the deadline for applications until 29th April 2016.

Expressions of Interest

Download the Expression of Interest Form and submit before the 31st March 2016.  

For more information, contact Ian Johnson at the office of the National Industry Scholarship Program on ijohnson@wla.edu.au 

 

 

 

 

 

 

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Chinese food: opportunities, realities and lessons in the Australia-China food relationship

Wednesday, 2 March 2016 | Posted in China by Renee Harrison

Perth Members Event: Presentation

Nicholas Creed and Tom Fotheringham from international law firm King & Wood Mallesons, gave an insightful presentation on the China-Australia agri-food trade and investment relationship at the PMA A-NZ Perth Members Event.  "It was great to have Nicholas and Tom present at our Members Event in Perth to impart great insights on China.  It was extremly valuable for our members" said Michael Worthing, CEO, PMA A-NZ.

The presentation is available for you to download and covered issues such as:

  • export / import controls and regulation (including ChAFTA)
  • trade finance options and PPSA tips
  • in-bound Australia investment from China.
Download the presenation

Click here to download:  Chinese food: opportunities, realities and lessons in the Australia-China food relationship

King & Wood Mallesons 

King & Wood Mallesons is the global law firm for Asia, having been establishedin2012through the merger of King & Wood, the pre-eminent Chinese law firm with 12 offices throughout China and Hong Kong, and Mallesons Stephen Jaques, the leading Australian corporate law firm with offices in Australia’s capital cities (including its oldest office (1831) in Perth). Both Heath and Nick work very closely with KWM partners in PRC to provide insightful advice to clients from both countries.

Speaker Information 

Nicholas Creed is a banking & finance partner with extensive experience in acting for Chinese banks in their investments in Australia and for Australian companies seeking finance from China. His recent experience includes the more than US$2 billion financing of the Chinese syndicated and bilateral loans for the Karara iron ore project in Western Australia and acting for an Australian bank on an Australian agricultural investment by a Chinese state owned enterprise.

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