Lower currency could help Aussie bumper Valencia crop

Today's Headline
Lower currency could help Aussie bumper Valencia crop

The fall in the Australian dollar may have come too late to help the country's navel orange farmers, but Riverina Citrus is hopeful it will help Valencia growers access new markets.

Australia's largest citrus-growing region is set for a significant jump in Valencia orange production this year to 130,000 metric tons (MT), and the country's currency is finally starting to move in the favor of growers.

Navel orange exporters struggled with returns this year as the Australian dollar hovered around US$1.10, and some currency analysts forecast it would go even higher.

But recently the dollar has dropped to between US$0.95-0.96, which while still far from historic level has given cause for optimism for a crop that is looking promising in the early stages.

Riverina Citrus CEO Dominic Testoni has told www.freshfruitportal.com the Valencia crop could possibly go better than expected, and the currency fall is good news even though it's come a bit late.

"It is disappointing that it’s come at the end of the season but hopefully we can get some key exports as the Valencias pick up through the summer months, and pick up new markets on the drop in the Aussie dollar," he says.

"Even at US$0.96 it’s a lot better than US$1.10 but not as good as US$0.85 - it's one of those things; it’s heading in the right direction and hopefully it will return more profit to our growers. If it makes our fruit more economical to purchase then it’s a win-win situation for everyone.

"We’ve already predicted a fairly large Valencia crop, and the way it’s going the season could lend itself to possibly exceeding those early forecasts, but once again we’ll wait and see once the Valencias starts to come on, how it holds up."

He says pre-harvest testing is currently underway with the season about to 'kick into gear' in the coming weeks.

"We’re doing some testing now, it’s ripening fairly well which is good, there’ s a big crop there so if there are more export opportunities for the crop then that’s a bonus."

His comments are echoed by Citrus Australia CEO Judith Damiani, who says the currency still needs to fall lower to get the best outcomes for growers.

"The dollar has fallen to around US$0.95 which is a mighty big relief after all those predictions of it going up to US$1.30. Unfortunately we are in the tail end of the export season and may only benefit with some remaining liquidation payments, such as some of the later shipments to the U.S.," she says.

"We require the dollar to fall to US$0.85 and lower for best outcomes. As the global economy is still very unpredictable we have to be prepared for the dollar to stay fairly high for a while and look at other ways of reducing some of our high costs. This of course is a big challenge in itself."

While expected volumes are much larger than last years' 50,000MT, the Valencias are forecast to be smaller with 74.5% at 63mm or less (count 150), 12.3%  between 64-65mm (count 138) and 7.2% between 66-67mm (count 125).

Related stories: Profitability under pressure for Aussie citrus

Aussie citrus growers looking for exit


Subscribe to our newsletter