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Exporting Victorian Citrus to China, Thailand and USA

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Exporting Victorian Citrus to China, Thailand and USA DEPARTMENT OF PRIMARY INDUSTRIES Exporting Victorian Citrus Exporting Victorian Citrus Opportunities, Options and Barriers for Exporting Victorian Citrus to China, Thailand and USA JUNE 2007 Published by the Victorian Government Department of Primary Industries Melbourne, June 2007 Also published on www.dpi.vic.gov.au/agribusiness © The State of Victoria Department of Primary Industries 2007 This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 . Authorised by the Victorian Government, GPO Box 4440, Melbourne. ISBN 978-1-74199-294-6 (Print) ISBN 978-1-74199-295-3 (Online) For more information visit the website at www.dpi.vic.gov.au or contact the DPI Customer Service Centre 136 186. Disclaimer This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication. Produced by: Agribusiness Group Department of Primary Industries 1 Spring Street PO Box 4440 Melbourne Victoria 3001 Author: Steven Lorimer Regional Agribusiness Development Officer, Swan Hill DPI Agribusiness Group Editor: Fiona Culley Senior Agribusiness Development Officer, Bendigo DPI Agribusiness Group EXECUTIVE SUMMARY The majority of the Victorian citrus crop is grown in the northern part of the Mallee in a geographical area described as the Sunraysia. This region also includes both sides of the River Murray from Barham downstream to the South Australian/Victorian border, and is commonly denoted as Victorian production. Victoria contributes at least 17% of the national crop, with a farm gate value of approximately $72 million (Australian Bureau of Statistics, Agricultural Survey, 2003/04). This report focuses on Victoria (and Australia’s) three major markets (China - including Hong Kong, Thailand and the USA) and the opportunities that exist for exporters. 2004/05 export figures show that Victoria was responsible for around half of the national exports of 52,000 tonne despatched to these markets which were valued at $46.8 million AUD. Both on a national and state level, navels are the most common citrus fruit exported to this group of countries at 70% and 80% of the total volume respectively. China China represents a potentially large volume market for Victorian citrus given Australia’s counter seasonality. Victorian fruit is of high quality and Australia has recently gained legal access to Northern China. The major barriers for entry to this market however are Fullers Rose Weevil (FRW), the requirement to compete cheaply on price in a volume market, lack of information on Northern China’s distribution and logistic chains and China’s own rapidly expanding domestic supply. Further work into FRW is recommended to enable Victoria to meet export protocols, as is an improvement in the knowledge of Northern China’s infrastructure. It has become apparent that smaller provincial areas of Northern China are showing signs of increasing affluence. As such, supplying smaller niche, higher value sub-sets of the Chinese market could prove more beneficial than attempting to compete with China’s domestic production or exports from other major low cost competitors. Thailand Even though the Thai population has shown a gradual increase in affluence, there have been no substantial increases in quantities of product exported to this market from Australia. This increasing affluence (along with a trend towards urbanisation) has given rise to a small proportion of Thailand’s large population that is ready to consume quality products. This may present an opportunity for a smaller volume, high quality, higher cost of production supplier such as the Victorian citrus industry. Supply could be satisfied with existing Victorian capability and grown overtime alongside continued increases in the affluence of the population. This market is further highlighted as an opportunity given that Australia already has legal access. Exporting Victorian Citrus DPI Agribusiness Group i USA The USA market has been established for many years and is a regular trading partner. Set up at the developmental stage of this market, enforceable Export Efficiency Powers (EEP) are in place as a means to maintain sustainable and stable trade with this market. Because of a narrow supply window for counter seasonal fruit this market provides little opportunity for expansion. In the future, Victorian supply into the China and USA markets will face much competition from these country’s own domestic supply, and from other large volume/low cost of production producers (eg USA to China and South Africa to USA). It is recommended that a majority share of international niche markets be the goal of the Victorian industry to satisfy a large portion of the Victorian production. To facilitate such entry it is recommended that a decision making tool is developed to assist exporters and growers to assess new or existing markets. This tool could be web-based and relay the latest possible market indicators as well as provide participants with a step by step instructional checklist to investigate new markets. Exporting Victorian Citrus DPI Agribusiness Group ii TABLE OF CONTENTS Executive Summary ................................................................................... ................................................................................................ ................................................................................................ ........................................................................................ ........... iii Table of ContentsContents................................................................................................................................................................................................................... ................................................................................................ .......................................................................................... ..........................iiiiiiiiiiii List of Tables ................................................................................... ................................................................................................ ................................................................................................ ................................................................................................ ................... iviviv List of Figures ................................................................................... ................................................................................................ ................................................................................................ ............................................................................................... .................. iviviv 1.1.1. IntroductionIntroduction................................................................................................................................................................................................................... ................................................................................................ ................................................................................... ...... 111 1.1. Overview .................................................................................................................................................... 1 1.2. Methodology .............................................................................................................................................. 1 1.3. Explanation of Terms ................................................................................................................................. 1 2.2.2. Product Information ................................................................................... ................................................................................................ ................................................................................................ ................................. 333 2.1. Citrus Varieties........................................................................................................................................... 3 2.2. Export Production ...................................................................................................................................... 3 3.3.3. Australian Industry Situational AnalysisAnalysis................................................................................................................... ................................................................................................ ......................................... 666 3.1. Australian Citrus Growing Regions ............................................................................................................. 6 3.2. Australian Production................................................................................................................................. 7 3.3. Australian Industry Export Capability.......................................................................................................... 8 3.4. Australian Industry Structure.....................................................................................................................
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