Australian nectarine exporters upbeat about China as season kicks off
As Australia's stonefruit season gets underway, expectations are high among nectarine exporters who are shipping their fruit into the Chinese market for the first time this year and feel unperturbed by the Chilean competition.
The head of industry body Summerfruit Australia (SAL) told www.freshfruitportal.com somewhere in the region of 45,000 metric tons (MT) of nectarines was typically produced in the country, and potentially a fifth of volumes could be shipped to China if everything went well.
"For the first season we will see how we go, there are always little hoops and hurdles to jump through," CEO John Moore said.
"If we get anywhere close to say 8,000-10,000MT I think that would be a pretty fair start for our first export season to China," he said, adding last year a total of 13,000MT were exported to available markets across all four stonefruit categories.
"In the past Hong Kong has been our biggest market and we don’t know where the nectarines find a home, so if it’s anything like volumes we’ve had in the past - 5,000MT - then another 3,000MT wouldn’t be unforeseeable."
Much of the fruit will be shipped via airfreight to begin with, and then seafreight in January and February when the volumes increase.
Moore said Australian shippers would generally be targeting the high-end part of the Chinese market, probably with a focus on e-commerce.
"For a lot of the Australian horticultural products that go into China, e-commerce is very popular," he said, adding many exporters already had good business contacts in the Asian country.
"There’s been a lot of interest since the protocol was highlighted in May, and a lot of activity showing up within China, not only in the wet markets but wholesale and retail too."
As for Chile's recent access to China - which was granted after a much shorter wait than Australia - Moore said a little competition in a large market was not an issue.
"We’ve been aware of Chile getting that - it’s been in the wings for the last year or so, so it was to be expected," he said.
"We have a little window against the Chilean exporters, in both cherries and stonefruit. Competition is healthy for everyone. Of course mother nature plays a big hand everything, so we will just see how we go."
The first nectarine consignment to China would likely be shipped in early November, he added.
Meanwhile, a representative of one of Australia's leading fruit exporters, Freshmax, said there was 'good optimism' in the industry for shipping to China for the first time.
"We are sure there will be challenges and difficulties in the early years of developing the China market and the direct benefits will not necessarily be known in the first one or two seasons," Freshmax IP and commercial manager Andrew Maughan said.
"It will be of paramount importance that the Australian fruit sent to China this season is good quality and meets customers’ expectations. There is a significant opportunity in China for Australian produced stonefruit, but a careful and disciplined approach to this market in the early stages will be necessary."
He added the fact Australia fruit was traditionally more expensive than the Southern American competition only emphasized the need to ship the 'right product' with the correct maturity and quality.
As for Chile also gaining market access, Maughan agreed with Moore that it had been anticipated and should not create problems.
"We currently compete with Chile in most of our Asian markets and China will be no different," he said.
"We are advantaged in Australia due to the closeness to the market compared to Chile. Australia also has a reputation for superior eating quality, which we must deliver on to leverage our position.
"We are not in a position to compete head to head with Chile from a price perspective due to costs of production, therefore we must be better at delivering the right varieties and the right quality."
Nicole Cutri of Cutri Fruit anticipated nectarine export volumes to be much higher than last year because of the Chinese access.
"We are looking at developing sales channels (retail, e-commerce & wholesale) and building strong, long-term partnerships within those channels. The focus will be on delivering a quality product and building the trust of our supply chain partners. This is a long-term project for Cutri Fruit." she said.
She added it was clear there was 'great potential' in China, and said the access gave shippers the chance to engage with consumers via regional wholesale, retail and e-commerce sale channels.
As for the Chilean competition, Cutri echoed Maughan's comments that it would be key for Australia to focus on quality.
"Chile is obviously a big player in the Southern Hemisphere fruit industry and they are very active in the China market," she said.
"We do have some advantage in terms of proximity to the market, though, with the lateness of the season there could be some overlap in supply. Australian nectarines are still seen as being a superior product to that of Chile, so we always have that advantage too.
"Chilean access won’t alter our China strategy too much. We feel if we maintain our focus on quality and providing the best eating experience to the Chinese consumer our offer will maintain a healthy position in the market."
The head of AFPC exports, Geoff Hagarty, said potential in China was 'undoubtedly huge'.
"This season we intend to coordinate with some of our existing supply partners to export Australian nectarines to several Chinese cities by both air and sea," he said.
"We will have brilliant varieties on the China floor well in time for the Spring Festival which will complement our cherries at this time."
He added that Chile's airfreight capabilities were limited, which was an advantage for Australia.
"Of course they are a strong player, but the world is growing. The is room for both of us," he said.
Aside from China, Moore also highlighted the Middle East was a 'burgeoning market' for the Australian stonefruit industry, with Singapore also seeing strong growth.
Maughan pointed out the industry recorded a 14% volume increase in exports last season, with double-digit growth to the Middle East and South East Asia.
Moore also said the slightly later than normal harvest this year meant the domestic market was very strong, and Cutri said that the Chinese access would take off a lot of pressure off the market, which she said has been oversupplied for some time.
Growing conditions and harvests
A colder spring than normal was responsible to for the delayed harvest this year, but Moore said the temperatures were now increasing. Cutri said the weather had been 'quite unusual' over the year.
"Our growing conditions have been quite unusual this year, due to the colder than usual weather and the wet winter," she said.
Speaking specifically about the state of Victoria - one of the country's leading growing regions - Freshmax field agronomist Tim Ring said it would be difficult to determine if all varieties would be harvest late or only the early ones.
"In my opinion we could see the maturity of later fruit revert to normal timing, giving a concertina effect," he said.
In terms of volumes from Victoria, he said in general peaches and nectarines were 'on the light side' compared with last season, but he said this would not directly result in there being a shortage in the domestic market.
"This is due to a reduced amount of thinning of fruit off the tree normally completed to maximise fruit size, but not required on some varieties and orchards," he said.
"Cherries are light and there is far less fruit than last season. Apricots and plums are variable with some growers having good crop loads, whilst others are light. But, as with peaches and nectarines, I do not envisage a shortfall
"Chill units have been lower this winter, along with the wet start to the season, and milder temperatures in all growing districts. The lack of chill units can in certain varieties and crop types lead to delayed flowering and flowing into later harvest timing. But as previously stated I believe that this may only effect the early season varieties."