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Pome Industry Situation Report 2020

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Pome Industry Situation Report 2020 AgKnowledge® connecting agriculture APPLE AND PEAR INDUSTRY SITUATION ANALYSIS 2020 Prepared to assist development of the POME FRUIT INDUSTRY STRATEGIC PLAN AUGUST 2020 æ APPLE AND PEAR INDUSTRY SituatiON ANALYSIS 2020 Pictures provided courtesy Nicole Giblett, Newton Orchards. II AGKNOWLEDGE® — CONNECTING AGRICULTURE AUGUST 2020 APPLE AND PEAR INDUSTRY SituatiON ANALYSIS 2020 æ CONTENTS Executive Summary 2 Pome Orchard Business Analysis results 55 GLOBAL POME FRUIT SITUATION 9 Australian Apple and Pear Breeding Programs 60 Apples 1. Global value and production 9 WESTERN AUSTRALIAN POME 2. International competitiveness FRUIT SITUATION 62 ranking 11 Apples 3. Southern Hemisphere production 13 1. WA value and production 62 4. Varieties 14 2. Regional production 63 5. Yield 16 3. Varieties 64 6. Trade 16 4. Trade 75 7. Consumption 20 5. Consumption 66 Pears Pears 8. Global value and production 22 6. WA value and production 67 9. Southern Hemisphere production 25 7. Regional production 67 10. Varieties 25 8. Varieties 68 11. Yield 25 9. Trade 68 12. Trade 26 10. Consumption 69 13. Consumption 27 Pome fruit production relative to Global Apple and Pear Breeding Programs 28 other WA fruit industries 70 AUSTRALIAN POME FRUIT SITUATION 31 Pome fruit trade relative to other Apples WA fruit industries 72 1. National value and production 31 REFERENCES 74 2. State Production 32 3. Varieties 35 4. Quality 37 5. Trade 38 6. Domestic Market 41 7. Consumption and consumer preferences 42 Pears 8. National Value and Production 45 9. State Pear Production 46 10. Varieties 47 11. Quality 48 12. Trade 48 13. Domestic Market 51 14. Consumption and consumer preferences 52 Pomewest would like to acknowledge the financial contribution by the Department of Primary Industries and Regional Development to the development of the 2021-25 Strategic Plan. AGKNOWLEDGE® — CONNECTING AGRICULTURE AUGUST 2020 1 æ APPLE AND PEAR INDUSTRY SituatiON ANALYSIS 2020 EXECUTIVE SUMMARY This report was commissioned by Pomewest as the sub-committee of the Pome, Citrus and Stone Fruit Producers’ Committee of the Agricultural Produce Commission in Western Australia to assist in the review and design of the next Strategic Plan for 2021-25 to guide direction for the WA Pome Fruit Industry. The first stage of the project was to conduct this Desktop Review and Analysis of the current global, Australian and Western Australian market situation for the apple and pear industries. The report draws on a wide range of industry reports, some of which were conflicting, and web-based information. Globally apple and pear production and the export market is dominated by China and the forecast is for increased global production and consumption in the future. Currently Australia is only a small player in the world market and Western Australia lags behind the other Australian pome fruit producing states: the majority of apples and pears produced in Australia are sold domestically with minimal volumes exported. While there are many threats that may hinder future development of the Western Australian apple and pear industries, there are also many opportunities for the local industry to capitalise on in order to become more efficient, productive and competitive in the market. Apples World apple production continues to grow with 35 per cent growth in the past nine years to see global production reach around 80 million tonnes of apples. China dominates the industry and produces almost half of the total output, Europe produces 17%, then 5% or less is produced by the United States, Poland, India, Iran and Italy. The Australian apple industry produces 0.4% of global production and is ranked 35th in the world. Southern Hemisphere producers which include Argentina, Brazil, Australia, Chile and New Zealand account for around 6-8% of global production. Australia is the smallest producer of apples in the Southern Hemisphere producing 6% of Southern Hemisphere production while New Zealand accounts for 11%. New Zealand was ranked first in an international competitiveness ranking of apple producers in 2017-18 in terms of production efficiency, industry infrastructure and inputs, and financial and market factors. Australia was ranked in the middle one third. Australia’s values are below the world average in most of the categories of production efficiency including planting density which is almost half of the top performers and yield per hectare is also low. Global apple production has continued to rise over the years through increased yields and increased production efficiencies. In 2016 the global average apple yield was around 17 tonnes per hectare and it was largely dominated by China which has an average yield in excess of 18 tonnes/ha and increasing, while the rest of the world is below the global average. In 2019 Australia produced 310,875 tonnes of apples of which 30% was sent to be processed, 1% was exported and 69% was fresh supply to the domestic market. Australia’s apple production for the 2020 harvest is expected to be the lowest in six years. The planted area remains relatively stable for apple production at around 9,500 hectares. An average of 69% of apples were classified as Class 1. 2 AGKNOWLEDGE® — CONNECTING AGRICULTURE AUGUST 2020 APPLE AND PEAR INDUSTRY SituatiON ANALYSIS 2020 æ While the Australian apple industry is a small player on a global scale, within Australia it is a significant player in the fruit industry. For the year ending June 2019 the Australian apple industry was valued at $513 million, making it the fifth highest value fruit industry in the nation behind berries, citrus, table grapes and bananas. In terms of production volume, the Australian pome fruit industry (apples and pears) accounted for 425,000 tonnes, making it the second highest producing fruit industry to citrus. Victoria leads in apple production and in 2019 accounted for 48% of production, followed by New South Wales with 12% and then Queensland, South Australia, Tasmania, and Western Australia all producing around 10% of the nation’s apples. Western Australia’s apple production was 21,950 tonnes in 2018-19 which may equate to 550 hectares planted to apples assuming each hectare produces 40 tonnes. Production of apples in WA has declined by almost 19% during the past ten years. Western Australia has the lowest production per business in Australia. In 2018-19 there were a total of 117 apple growers in Western Australia, the majority located in the Manjimup/Pemberton region which produced 60% of the State’s apples, Donnybrook produced 21%, Perth Hills 14% and Jarrahdale/Dwellingup 5%. There are over 7,500 apple tree varieties worldwide. The most popular varieties worldwide (excluding China) include Golden Delicious, Royal Gala, Delicious, Fuji, Idared and Granny Smith. While China produces half of the world’s apples, 70% of their production is Fuji so overall Fuji comprises 43% of world apple production. In the Southern Hemisphere the most popular variety grown is Royal Gala, followed by Fuji and Red Delicious. Australian apple production for the fresh market in 2019 was dominated by Pink Lady followed by Gala and then Granny Smith. A number of newer club apples such as Jazz™, Kanzi™, Envy™, Smitten™, Rockit™ and Bravo™ have been increasing in production recently. Western Australia is the home of the Cripp’s Pink variety (sold as Pink Lady®) which is now the most widely grown apple nationally accounting for nearly a third of production, and more recently the Bravo™ apple. In WA Pink Lady is the most popular apple and Granny Smith is the second major variety. Market share of club varieties in WA is 17%, which is more than the Australian average. Apples are a widely traded commodity, with the share of exports in total global output being about 11% in 2019. Global sales were 8.2 million tonnes totalling US$7.2 billion in value. China leads the export market with a 12% share followed by the US at 10%, then Italy and Poland. Australia is a minor apple exporter on the world front with just 0.05% of world export volumes. Australia ranks 50th in quantity and 41st in value of exports. Apples will continue to be highly traded, fuelled by increasing consumption, trade liberalisation policies, and intense global and regional integration. Russia was the biggest importer of apples by volume with 701,000 tonnes followed by Germany at 603,000 tonnes which represented 16% of total global apple imports. In value terms, the largest apple importing markets worldwide were Germany ($482m), the UK ($424m) and Russia ($394m), together accounting for 18% of global imports. India also had a high growth in imports. In general imports are increasing in Asian, African and Middle Eastern countries. Imports declined in traditional apple consuming countries such as the UK. Australia was ranked at 140 on apple imports with minimal volumes of 732 tonnes of fresh apples imported in 2019 valued at $1.9m, down from the previous year, plus there were 1,001 tonnes of dried apples ($5.6m) and 24.2 mega litres of apple juice ($44.7m) imported. Only two states imported apples in 2019; Victoria made up 70% of the nation’s apple imports and NSW imported 30% of the total. Apples were imported from China (79%) and New Zealand (21%). Protocols exist to permit the import of apples from New Zealand, China and Japan and an import risk analysis is currently underway by DAWR to permit entry of US-grown apples. More than 99% of apples sold in Australia are locally grown therefore Australian apple exports remain low with 1-2% of total production exported each year. This is typically between 2,000-5,000 tonnes per year. For the year ending June 2019 Australia exported 4,416 tonnes worth $10.6m plus an additional 42 tonnes of dried apples ($0.3m) and 2.8 mega litres of apple juice ($4.9m) exported.
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