FTAs are helping Aussie fruit and veg producers, IBISWorld

Posted by AFN Staff Writers on 16th January 2017

Free trade agreements (FTAs) secured by Australia with China, Japan and South Korea in 2014 and 2015 are benefiting Australian fruit and vegetable producers according to new data analysed and published by IBISWorld.

Analysing the impact of the FTAs, Senior Industry Analyst at IBISWorld, Sam Johnson, said although many tariffs will remain for some years yet, Australian farmers have been busy creating important supply links with wholesalers and retailers across China, Japan and South Korea.

“Australian fruit and vegetable exports to Asia, particularly to countries that have FTAs with Australia, will continue to enjoy healthy growth over the next five years and well into the future as Australia positions itself as a major food supplier for increasingly wealthy Asian consumers,” Johnson said.

Citrus, banana and almond growers in for a win

Citrus, banana and other fruit growers have welcomed the FTAs, with revenue from exports growing at an annualised 19.9 per cent over the five years through 2016-17.

“Exports in the Citrus, Banana and Other Fruit Growing industry will generate AUD $689.6 million in the current financial year,” said Johnson.

“Australian almonds have performed particularly well, outpacing robust export growth across the overall industry. While FTAs have contributed to this success, almond growers have enjoyed larger harvests due to significant planting in 2006 and 2007. Water shortages that adversely affected Californian growers, the world’s largest supplier of almonds, also pushed global prices upwards over 2015 and 2016,” added Johnson.

Asia after Aussie veggies

Outdoor vegetable growers have also benefitted from the FTAs, with revenue from exports increasing at an annualised 8.9 per cent over the five years through 2016-17.

“According to IBISWorld, exports of outdoor vegetables will generate AUD $303.7 million in 2016-17,” said Johnson.

Asparagus exports to South Korea have driven some growth over the last five years, rising in value by 123 per cent between 2014 and 2015. Other vegetables that have been successful in China, Japan and South Korea under the FTAs include lettuces, broccoli and broccolini, beans, spinach, cabbage, cauliflower, celery and peas,” added Johnson.

The total value of Australian vegetable exports to China alone increased from AUD $570,000 in 2014-15 to AUD $17.2 million in the following year.

FTAs not good for everyone

“While the FTAs are largely positive for Australian producers, the story is less positive in some areas,” Johnson said.

“Avocado growers have yet to benefit from falling tariffs on their produce. Despite tariffs on Australian avocados entering China set to fall from 25 per cent to 0 per cent from January 2019 onward, Australian avocado growers have yet to secure access to Chinese markets,” he stated.

“A lack of quarantine market access protocol means that growers will have to prove that quarantine risks are manageable and import processes can be safely implemented. Meanwhile, Mexican and Chilean avocados have already secured access to China, which could limit the growth potential for domestic growers once exports to China commence,” stated Johnson.

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