WESTERN AUSTRALIAN fruit exports to Asia are under threat, with a crackdown on the trade by Chinese officials compounding problems associated with a strong currency, among other things.
Industry players report that the tightening of the lucrative ‘grey’ market trade into China is already having a big impact on eastern States fruit exporters and warn of similar repercussions in WA when the stone fruit season commences.
With market saturation from cheaper producers located in South America and Africa, industry bodies have turned to Canberra to address the market access issues in Asia, particularly China.
Australia’s fruit export woes to China appear to stem from the fact that Australia has no legal framework in place with China for the export of fruit, with the exception of Tasmanian apples.
While that has not stopped Australian fruit exports entering mainland China through Guangdong province after being received in Hong Kong, it has left this lucrative business in jeopardy when authorities decided to act.
Australia is not alone in this, with many other countries exporting fruit and other goods to China through similar channels.
The Chinese Government had previously turned a blind eye to the grey market trade in fruit and other goods but has recently begun a crackdown on it.
Industry sources say this is already having a devastating impact on eastern States citrus producers, with reports of several container loads of fruit being confiscated and destroyed by Chinese authorities.
With WA a major exporter of stone fruit to China, particularly plums and nectarines, the impact is expected to be felt in WA during this coming summer season.
WA fruit exporter, United Exports managing director Roger Horak said the restricted market access to China would have a huge financial impact on WA’s fruit industry.
He conservatively estimated a loss of revenue to WA producers of about $6 million a year for plums alone.
Mr Horak said United Exports faced a loss of up to $2.5 million in revenue for plums because China was their biggest plum export market.
He said the situation would force the company to look for other markets and other suppliers would find themselves in a similar position.
Trident Holdings spokesman Conrad Sumich said the full impact of the Chinese crack down remained to be seen.
“We finished our plum exports back in March, so it’s not really an issue for us yet,” he said.
However, Mr Sumich envisages the repercussions for WA’s growers will be “horrendous” due the large quantity of WA fruit that is exported to China.
“Unfortunately, because of the nature of the market and the quantities [that are exported], there will be nowhere else for the product to go,” he said.
Old Valley Holdings spokesman Ben Walker voiced similar concerns.
“I would expect it would impact our stone fruit business substantially, not only in direct loss of access into China, but also because we will have other countries such as South Africa and Chile experiencing the same thing and they will be flooding the market,” he said.
“It is very frustrating that the industry hasn’t represented itself very well before, but Horticulture Australia Limited should be taking up that cause.”
However, while government and industry bodies such as Horticulture Australia say improved market access for Australian horticultural products to China is a high priority in Australia’s bilateral trade agenda, there are calls for the Australian fruit industry to band together to maximise its marketing clout in Asia.
Hong Kong fruit importer, Park ‘n’ Shop commercial manager Noel Shield said failing to do so would result in both the Australian and WA fruit industries risking millions of dollars in exports through lower pricing and restricted market access – not just in China but in the Asian region as a whole.
Mr Shield said Western Australian fruit growers needed to be more competitive and more professional in their approach to tackling the Asian market or risk being forced from the market altogether.
Goldland Australia spokesperson John Cicchini said the industry needed a concerted effort to rectify the situation facing it.
Mr Cicchini said it was up to the industry to join forces.
“If you leave it up to Horticulture Australia, you will get a half-hearted effort because they don’t have the resources,” he said.
However, Horticulture Australia Limited managing director John Webster said his organisation had formed a committee that was working with the Federal Government to address Chinese market access.
“We have come to the conclusion that China is a priority,” he said.
“We’ve drafted a strategy to move forward to improve market access and are in the process of sitting down with Canberra about that … but we’re not in the implementation stage yet.
“Our aim is to increase the speed of formal approval of imports from Australia to China and every time Canberra and China sit down there are products to prioritise.”
Department of Foreign Affairs WA state director Stephen Scott said DFAT and the Federal Department of Agriculture, Fisheries, Forestry were liaising closely with horticulture producers through the Horticulture Market Access Committee to identify and pursue market access priorities.
However, he said current market access priorities were for citrus and mangoes.
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