Aussies optimistic for mandarin shipment prospects
Australia's imperial mandarin season is coming to a close, making way for the country's big ticket easy peeler varieties of afourer and murcott mandarins. Crop conditions have led to bigger sizes this year, which comes with its challenges and benefits depending on the export market concerned. At www.freshfruitportal.com we speak with key industry players about the positive impacts of a currency that has eased somewhat, negotiations for new market protocols and Australia's competitive advantages despite higher input costs.
Citrus Australia market development general manager Andrew Harty says the country now has its first "real balanced citrus crop" since the drought years.
"The trees got a good mix of fruit and new growth for next year’s crop - we now have a balance that we haven't had for many years," he says.
"What that will mean for the traders is that fruit size has gone up, typically about two count sizes, and that makes a huge difference to the amount of export packout you can achieve.
"The external quality of the fruit is better, particularly in Queensland where they had some pretty rough weather last season from the flooding; this year there's less pressure from fungal disease so the fruit is a lot cleaner, and the taste of the fruit is lining up to be pretty good too."
Harty says to date there have been small export volumes of easy peelers like imperials, satsumas, fall glows and clementines, but next month shipments will ramp up with the afourer and murcott varieties.
"The murcott program is the most established one and that's been running for decades out of Queensland, primarily into Asia where the Australian murcott has a really good reputation for its sweetness and also its soundness; its ability to have a good shelf life and to travel.
Murcotts in Asia
Barry Scott, general manager of Australia's largest mandarin grower Gayndah Packers, tells www.freshfruitportal.com his company will start moving murcott exports to Japan in the next three or four weeks.
"Japan at the moment looks as though it will be a reasonable market with reasonable prices, but it is a problem because they only take very small fruit, and this year the murcotts are reasonably big.
"We have a market in Japan for the very early fruit and the small fruit, and preferably the low season murcotts. It's a limited window, about six weeks of opportunity so we get it in early.
"It’s difficult for anyone to get in at that time because it’s in July-August and most people don’t have much at that time, and it’s just before the local fruit comes in; it gets chopped off pretty quickly once the local fruit hits the market."
He says the size won't be a great issue however as most other markets prefer the bigger sizes, so the larger mandarins can go elsewhere, such as other Asian countries and the Middle East. Queenslanders cannot ship to the U.S. unlike their southern compatriots due to its status of black spot, but authorities have submitted an application with the United States Department of Agriculture (USDA) as a long term prospect.
"We’re desperately trying to get relief but we’re registered as a black spot area so even though we’ve got spray regimes and so forth to overcome it, they’re still working to get the American access.
"I’ve been in the industry for 10 years - I came from another industry to here - and that’s been on the go from the time I arrived and I have not seen any significant change, so it's very difficult to make any assessment as to what will or won’t happen there."
When it comes to returns Scott is cautiously optimistic.
"We are getting indications that with the dollar not rushing above parity it’s got a chance of a reasonable sale, so we’ll just have to see how we go."
The afourer advance
Harty says the afourer program is newer for Australia as its only been extensively planted over the last decade, with trees that are now starting to crop extensively.
"That is a product that people are exploring their options with in Asia. There is already a good uptake in New Zealand and there are prospects in Europe where it is already a well-known product over there.
"People are also looking at wealthier Asian nations like Japan to be a stronger outlet for afourer mandarins, where they have got some presence because of the U.S. program there which is counterseasonal to ours."
The market wrap
Harty highlights the industry has had to adapt to the challenges brought by lower-cost competitors such as Chile, Peru, Argentina and South Africa.
"Up until now, certainly in the last three to four years, the push from South America has been into the U.S. and that has significantly impacted on our program there, and in turn we’ve refocused on Asian markets.
"Japan is now our biggest market for citrus. It was last year for the first time, clipping the U.S. significantly and will be again this year.
"We’re pushing to get more product into newer Asian markets for us, which is mainland China, Korea and Thailand; they're the three we're focusing on to get market improvements."
He says Korea is more of a long term project for mandarins - Australia is already exporting oranges there - because it has a very protected local industry.
"That's going to be a hard one to crack but it's something we're definitely working on for the future."
As for Thailand, Australia has reached a protocol with orchard control meathods against the Fuller Rose weevil, but the industry is looking for a lower-cost post harvest methods to control it.
"We believe if shippers here focus very much on the sweetness of the fruit they’re sending over to Thailand, there are very good prospects there.
"Thai people are well-exposed to mandarins, it’s a type of citrus that they prefer because again they have a domestic industry during the counterseason and they get product also from China and other countries around them.
"Our packers need to make sure the acid has dropped out of the fruit, and there’s good brix levels there, as the Thai palate is for quite a sweet, low acid fruit."
He says Australia's main export months for mandarins are July, August and September. As for the U.S. market, there are currently daisy mandarins "on the boat" to North America.
Harty says Australia has advantages over its competitors due to its advances in food safety.
"Our industry has a very good record of integrated pest management. We have very low chemical usage and so we’re also setting some residue monitoring programs, particularly in Japan at the moment, but we’re planning on expanding that to other markets.
"All of that gives more confidence to buyers, that they’re not going to have problems with residues or food safety issues on arrival, and we’re leading the way there compared to our competitors.
"We have better traceability systems, our packhouses are very modern and mechanized."
He adds that geographic closeness has a part to play as well.
"Our advantage over other countries is that we can deliver product fresher; we're just that much closer. We’re only half the sea journey that shipping from Chile has to make it to north Asia, and so the freshness and the taste of the fruit is better.
"That allows the buyers much shorter ordering times; instead of placing 35 days ahead for a Chilean shipment, you can place it two weeks ahead for an Australian shipment.
However, Australia is at a disadvantage in this sense in the Middle East.
"South Africa is a concern for us in some of the lower end markets, particularly the Middle East where they’ve got a huge program.
"We struggle to compete with them there – in a sense they’ve set a lower tier of product and it tends to be a whole lot cheaper."
Harty says it is important to clarify that while Australian growers might not get great returns in markets that accept lower tier fruit, such as the Middle East and South Asia, they are still very important for the industry.
"These lower price markets are still valuable as they can absorb the lower tier fruit, and that's not lower quality in taste but just appearance; the return to growers might not be great but it does have importance for the overall supply dynamic."
Barry agrees that Australia holds a geographic advantage in Asia, but competition is difficult.
"The Australian product has also got a good reputation for being clean and green, so it gives us an opportunity to hold our own, but it is a struggle, especially when competitors start putting 50 or 60 containers onto consignment in a place like Hong Kong. It’s just very difficult to move against that.
"Generally it’s very difficult if you’re in direct competition with them timewise because they can always sell slightly cheaper than us and they are also prepared to sell on consignment which we won't do.
"We don’t really have any choice in that regard – we just have to struggle along when we’re in direct competition, but most of the time we’re not. We get a fair run most of the time."
Mildura Fruit Company marketing manager Ferdi Bergamin says he is "pretty positive" about the season, with similar production levels but better sizing.
"We export to 30 different countries around the world so it’ll be shotgunned everywhere - the main markets for us are the U.S., South East Asia, northern Asia, the Middle East and Europe.
"We’re pretty positive about the season, the fruit quality is good, we’ve got good sizing and the fruit is eating well, so it’s all positive.
"We’re in the midst of it now, we’ve been exporting two months, going on three and it’s all going pretty well."