Australia: Reid Fruits sees interest "drop off" in China for cherries

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Australia: Reid Fruits sees interest

An influx of Chilean fruit has put the market under pressure, but the Tasmanian grower is experiencing a good season nonetheless with a wide range of export opportunities worldwide.

"Our feedback has certainly been that the interest in cherries generally - in fact the interest in fruit generally - is a little bit slow [in China]," says Reid Fruits marketing and business development manager Lucy Gregg. 

This is probably due to several factors. Markets tend to be quiet anyway in the wake of Christmas and New Year, consumers usually buy less fruit when there are snow storms outside, and this year the supply dynamic is markedly different.

Gregg highlights that last season an early Chinese New Year date combined with lighter crops from Tasmania and Chile meant there were "nowhere near enough cherries to supply demand" in China. But this year, Chile is set to export at least 150,000 metric tons (MT) of the sweet fruit, with the majority of that volume destined for China.

"Obviously we’ve noticed a drop-off in interest from China because the market’s got a lot of Chilean fruit in there, but we’ve always kept our sales into China at 30%," Gregg tells Fresh Fruit Portal

"So for us it’s actually just been a case of reaching out to our existing markets and feeding volume into them," she says.

"We’d actually sold probably close to a third of our crop before Christmas anyway and probably a third before the first of the major Chilean arrivals turned up. It's added an interesting dynamic to the season but we’ve been lucky enough to find alternative markets."

She says that in addition to China, the company has been selling cherries through from Northeast Asia to Southeast Asia, and has even done some sales into the USA and Europe.

"We started picking in mid-December so we were lucky enough to have the pre-Christmas market rush in markets that observe Christmas, and in the New Year, last week was probably a bit of hard work but now we’re just starting to see these other markets respond.

"Plus Australian mainland cherries are starting to decline in volume so we’re starting to see less of those in markets such as Singapore and Malaysia. That’s another opening for us.

"If you had all your eggs in one basket I think you’d definitely be smarting."

She says while the industry seems to be seeing a "general apathy" in China for fruit purchases, interest is likely to pick up now that the "four-week countdown" is starting for Chinese New Year.

"For production this season we've been so fortunate, particularly for us up in the Derwent Valley; we've had absolutely minimal rain so the packouts are really high," she says. 

"The feedback has been that the Chilean fruit has been quite large and the quality has been quite good, so for them the planets have aligned as well. It just goes to show the dynamic. 

"They say a day’s a long time in politics. A day is a long time in the cherry world as well."

Comparative disadvantage in Taiwan

Gregg says another issue that has affected Australian cherry exporters is the free trade agreement (FTA) signed between New Zealand and Taiwan.

"Australia doesn’t have a free trade agreement with Taiwan, and Taiwan certainly was one of our key markets but because we’re at a 20% disadvantage straight away because of the tariff, that certainly hasn’t been the market we thought it would have potentially been either," Gregg says.

"But New Zealand, from what we hear, has had an earlier season so now we’re starting to get reports that New Zealand fruit is potentially drying up in some of these markets so that’s an opportunity for us as well."

Photo: Reid Fruits




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