Citrus Annual 2012

An Expert's View about Citrus Fruits in Australia

Posted on: 28 Dec 2012

Fresh orange production in Australia is forecast to fall by nearly 25 per cent to 340,000 metric tons in MY 2012/13.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/14/2012 AS1226 GAIN Report Number: Citrus Annual 2012 Approved By: Joe Carroll, Agricultural Counselor Prepared By: Rebecca Gowen, Agricultural Specialist Report Highlights: Fresh orange production in Australia is forecast to fall by nearly 25 per cent to 340,000 metric tons in MY 2012/13. Exports are also forecast to fall to 90,000 metric tons and imports increase to 30,000 metric tons. The decrease in exports has been driven by the high Australian dollar and increased competition from South America. Low prices, particularly for juicing oranges have led some growers to leave fruit on the trees as it was uneconomical to harvest. Large volumes of fruit have also been turned into cattle feed. Fresh Orange Production Despite good fruit quality and size fresh orange production is forecast to fall in MY 2012/13 as lower domestic demand and exchange rate pressures have reduced returns to growers. The above average rainfall across most growing areas in the last two years had allowed trees to recover well after the lengthy drought with the result that production had been average to above average. However, continued low prices have hurt many growers and there have been reports of trees being removed as production becomes uneconomical. In Queensland there have been warnings about Asian citrus psyllid (greening disease) which if not managed well could be a major threat to the industry. Orange Juice Production Processing of the MY 2012/13 Navel crop is almost complete with a further reduction in volumes compared to last year. Harvest of the Valencia crop has just started but demand for juicing oranges is low. Juice varieties have been hardest hit by the high Australian dollar with large amount of fruit remaining unpicked or turned into cattle feed. Cooler temperatures during the last two summers may also have reduced the demand for juice. It is hoped that a return to higher temperatures this summer may increase domestic demand. Exports Exports of fresh oranges are forecast to fall to 90,000 metric tons with juice exports also expected to fall further. The record highs of the Australian dollar are forecast to continue and possibly increase which will continue to limit exports. On the November 14th 2012 the Indonesian government agreed to release 700 containers of chilled Australian fresh fruit and vegetables, including some citrus which had been held by Indonesian Customs on the Jakarta and Surabaya docks for two weeks. The hold-up had occurred due to reports that oranges were being relabeled as mandarins to avoid tariffs. New auditing procedures will come into effect next month in an effort to avoid future problems. Imports Australia imported 25,000 metric tons of fresh oranges in MY 2011/12 and 29,500 metric tons of orange juice. Over 90 per cent of fresh orange imports consistently come from the United States of America while 80 per cent of orange juice imports come from Brazil. With domestic production declining and the continuing high Australian dollar it is likely that imports will continue to increase. Production, Supply and Demand Statistics 2010/2011 2011/2012 2012/2013 Oranges, Fre Market Year Begin: Market Year Begin: Market Year Begin: sh Au Apr 2011 Apr 2012 Apr 2012 stralia USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 19,500 19,500 19,400 19,400 19,350 Area Harvested 16,700 16,700 16,600 16,600 16,500 Bearing Trees 7,300 7,300 7,255 7,255 7,200 Non-Bearing Trees 1,190 1,190 1,180 1,180 1,100 Total No. Of Trees 8,490 8,490 8,435 8,435 8,300 Production 440 300 440 390 340 Imports 24 35 24 25 30 Total Supply 464 335 464 415 370 Exports 95 85 100 120 90 Fresh Dom. 229 150 234 167 170 Consumption For Processing 140 100 130 128 110 Total Distribution 464 335 464 415 370 HECTARES, 1000 TREES, 1000 MT 2010/2011 2011/2012 2012/2013 Oran Market Year Begin: Market Year Begin: Market Year Begin: ge Juice A Jul 2010 Jul 2011 Jul 2012 ustralia USDA New USDA New USDA New Official Post Official Post Official Post Deliv. To 140,000 100,000 130,000 128,000 110,000 Processors Beginning Stocks 166 166 835 576 276 Production 10,769 7,700 10,000 10,000 8,500 Imports 30,000 32,500 31,000 29,500 31,500 Total Supply 40,935 40,366 41,835 40,076 40,276 Exports 1,100 790 1,100 800 800 Domestic 39,000 39,000 40,000 39,000 39,000 Consumption Ending Stocks 835 576 735 276 426 Total 40,935 40,366 41,835 40,076 40,226 Distribution MT Seasonal conditions Rainfall across the major citrus production areas in Australia has been well below average over the winter and spring (July – November). However because the past two years have seen above average rainfall the majority of trees have recovered well after the last drought and are not affected by this drier period. There are mixed forecasts about the up-coming wet season with most predictions being well below the previous two years and likely a high degree of variability in rainfall across different regions. Murray Darling Basin Plan The Murray-Darling Basin Plan was passed by the Australian Parliament on the November 22 , 2012. After an extended period of consultation and negotiation the reaction from most commodity groups is that the plan is not perfect but it is much better for farmers than the original. The ‘Plan’ is based on a return of 2750 gigalitres to the environment through a combination of water allocation buybacks and infrastructure improvements. For citrus growers relevant changes will not be implemented until 2019 which provides ample time for adjustment but also the possibility that policies could change in the interim. Deregulation Citrus exports from Australia are partly regulated as a quality control measure. Only one United States importer has been registered to receive citrus exports from Australia and there are also restrictions on exports to China. A report recently provided to the Australian Federal Minister for Agriculture has recommended full deregulation of citrus exports. Similar to the wheat industry citrus growers are currently divided on the best course of action and the peak commodity group, Citrus Australia is drafting a recommendation to the Australian Government’s Minister for Agriculture. However, unlike wheat, deregulation of citrus does not require new legislation, only a change in regulation which can be approved by the Minister alone.
Posted: 28 December 2012

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