China falls head over heels in love for South Australian oranges
Written on the 17 July 2018 by David Simmons
As the only state with fruit-fly free oranges in the country, South Australia has been the nation's leader in quality citrus production for decades.
Now, China has cottoned on to the quality of South Aussie fruit, and has a voracious appetite for the state's "premium" fruit.
Export is now the big play for SA orange growers following the premium status recognition by the Chinese Government.
Whilst the Chinese recognition officially came in November 2017, the full benefits are only now just beginning for growers and exporters as the first shipment of navel orange are arriving on Chinese shores.
Pest-free recognition from China now means South Australian oranges can be sent to Asia via the more direct route of Port Adelaide cutting about a week off the month-long journey from packing shed to retailer. Previously the Chinese Government had required all Australian oranges to be cold-treated and shipped from Melbourne, incurring additional costs for growers of about $200 a tonne.
Australian citrus exports totalled 273,232 tonnes last year at a value of $462 million. This represented a 19 per cent growth in volume and a 32pc growth in value. About 71,000 tonnes of this more than a quarter went to China.
For growers like the Locert Bros, who have been processing citrus in the Riverland for 50 years, the recognition by China will be a major boom.
While Singapore is still the group's biggest export market of its 20,000 tonnes of fruit per year, China is creeping up.
Managing Director Robert Lochert said the added demand from China had helped increase prices for growers across the whole market.
"The demand has certainly been a stimulant for the whole orange industry in Australia," Lochert said.
"The fact that they are looking for it and pay reasonable prices and because of that strong demand it's firmed up the other markets, which is fantastic.
"I hope it continues and I think it's important that we have that Chinese market because it's brought a lot of stability into the industry."
The Chinese recognition follows on from Indonesian certification of the Riverland as a Pest Free Area in December 2016.
Other export markets recognising the Riverland Pest Free Area include the United States, Thailand, Japan and New Zealand.
The changes come at an opportune time for South Australian growers as they coincide with the Free Trade Agreement between Australia and China, which will make citrus relatively cheaper across Asia over time.
Citrus Australia Market Access Manager David Daniels said that while the savings for Riverland growers as a result of the Pest Free Accreditation were "substantial", strong Asian markets were benefitting all Australian citrus exporters.
He said there was room for significant further growth in Asia, particularly in China and Japan, where Riverland growers already had a strong presence.
"The returns are very good at the moment and so they should be," Daniels said.
"The growers put a lot of hard work into that fruit and it's some of the best fruit in the world they are supplying."
Business News Australia
Author: David Simmons