The Australian Horticulture Exporters’ Association (AHEA) has cautiously welcomed yesterday’s announcement of a free trade agreement (FTA) between Australia and China.
AHEA executive director Michelle Christoe said the trade pact would allow Australian producers and exporters to compete on even terms with rival Southern Hemisphere producers.
“New Zealand, Chile and Peru are Australia’s major competitors producing similar products in similar seasons,” Christoe explained in a media release. “These countries are strongly export focused and haveexisting FTAswithChina.Australia cannot compete and maximise market opportunities without anFTA.”
Christoe went on to highlight that China was an increasingly attractive market for Australian producers, with export volumes to the People’s Republic doubling over the last five years. However, the AHEA release described Australia’s total share of the China’s fresh produce import trade as “negligible.”
Citrus, table grapes, mangoes and Tasmanian cherries account for the majority of Australian fresh fruit imports that enter the Asian nation.
According to AHEA figures, Australia’s direct citrus exports to mainland China accounted for less than 0.3 per cent of the total market share, while grape and apple export volumes were again described as “negligible.”
The AHEA said high tariff rates and difficult quarantine protocols continued to limit opportunities for Australian suppliers in China.
“It is important to note that the China FTA does not take into consideration that Australia does not have access to the China market for particular produce, which will require ongoing negotiation during future protocol discussions,” the release said.
Quality not quantity
Despite what is seemingly a relatively small export volume base, the value of Australia’s fresh produce trade is relatively high across key categories.
Figures released by Fresh Intelligence Consulting, based on WTO data, suggest Australian orange exports to China topped A$14m (US$12m) over the 12 months to 1 July 2014, despite an 11 per cent tariff. Mandarins (12 per cent tariff) pulled-in around A$8.6m (US$7.4m) for Australian exporters, while the cherry trade (10 per cent tariff) was valued at A$2.86m (US$2.49m).
Table grapes dipped below A$1m (US$870,000) in 2013/14 after market access issues derailed the start of Australian export programmes into China. The trade had been valued at around A$10m (US$9m) a year earlier.
Going nuts
The FTA is expected to further accelerate the rapid growth of Australian tree nut exports into China. Already Australia’s most valuable horticultural industry, generating over A$600m (US$523m) annually, the nuts category will now have greater flexibility to target the world’s most populated market.
“With the deal phasing out all nut tariffs over five years, is very important, more for the future of the industry than it is today,” noted Jolyon Burnett, chairman of the Australian Nut Industry Council. “It puts Australia on a level playing field with some of our key international competitors in the Chinese market.”
Almonds produce over 50 per cent of the current Australian tree nut crop. With exports doubling to 68,000 tonnes since 2010, the industry is looking to lessen the potential for overreliance on any one particular market. “Despite China being the second largest consumer of almonds in the world it is supplied almost exclusively by the US,” Ross Skinner, CEO of the Almond Board of Australia said. “The removal of the tariff on Australian almonds exported to China will intensify the interest of our marketers in that market.”
