Orange growers could exit industry if high Aussie dollar continues -

Orange growers could exit industry if high Aussie dollar continues

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Orange growers could exit industry if high Aussie dollar continues

Australia's orange exports to the U.S. are 'ticking over' but growers may need to leave the industry if exchange rate woes continue for many years, says Riverina Citrus CEO Dominic Testoni.

Testoni told it was too uncertain to tell what would happen with Australia's exchange rate, but if it continued above US$1 for too long the industry would be in further trouble.

"A lot of farmers I've been speaking to, especially in the last few weeks, have indicated that if it’s one year you can hold on but if it’s two to three years it becomes very difficult," he says.

"I would hate to see people leave too early, but at the same time, if you’re back's against the wall then there are tough decisions that need to be made.

"While the dollar’s up obviously people are becoming nervous, and none of the analysts can say which way it’s going to go. Only a month ago they were talking about US$1.20, and in the space of two weeks it went from US$1.10 to below parity."

He says everyone in the industry is hoping he Australian dollar returns to US$0.80.

"Exporting should become competitive again at that level, and even importing is still attractive, but while it’s hovering over US$1, US$1.04 at the moment, it’s really making it difficult for all types of exporting, especially agriculture.

"Our exports, while still ticking over, are still down on last season. The Aussie dollar’s still having an impact, sort of forcing a fair bit of fruit onto the domestic market, and it’s causing a bit of a glut. There’s still a fair bit of fruit left on the trees."

Last week U.S. marketer DNE World Fruit Sales told that retailers couldn't get enough of Australian citrus and wished they could receive more.

Testoni says Australian growers would be happy to oblige, but most likely exporters were cutting back due to fears for returns.

"I was a bit surprised by the comment that they wish they could get more, as obviously there’s plenty around that people would like to export, but the reason why they’re not pushing it out as quickly as they’d like, I’m not too sure to be honest," he says.

"There's lots of sheds that would love to be exporting a lot more. I guess that the high Aussie dollar has made a lot of exporters nervous as the returns just aren’t there.

"If it’s on consignment and the dollars just aren’t there, the grower could be left with a bill, so that could be one thing that’s slowing exports down. The few exporters I've spoken to say the market’s there but the returns are very low and they just can’t afford it."

Testoni says despite the problems, the industry needs to keep its resolve and continue with its strict quality standards.

"The quality’s still there and people are selectively picking as well. We’re very mindful that what we’re putting out to the market place is quality.

"The consumer will judge and if you put out an inferior product out there you just damage further sales, so it’s important that what we do put out there is taken by market. We just have to remain positive."

He says Aussie Orange Week was also a success.

"It's a good concept. We need to get the message to the consumer not only to buy Australian produce but citrus in general, and it’s through these mass media campaigns that you can get to the consumer and make a difference. It’s been positive actually."

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