Christmas could come early for Australian table grape exporters, should a free trade agreement (FTA) with South Korea be ratified in early December.
Speculation is mounting that the trade pact, agreed to by both nations late last year, could officially be signed next month. David Minnis, chairman of the Australian Horticultural Exporters Association (AHEA), said Australian suppliers would receive a timely boost if the FTA is ratified over the coming weeks.
“We would see the first round of tariff reductions (agreed to under the FTA) introduced immediately, then we would have another set of reductions on 1 January (2015), as they are lowered on the first day of each calendar year,” Minnis told Asiafruit.
The table grape industry would emerge as one of the big winners from the timing of the deal, with exports out of the key Sunraysia production hub set to get underway in January.
After winning access to the South Korean market in December last year, the Australian industry had success with a trial shipment to the Asian nation at the tail end of the 2014 season. However, South Korea’s current 47 per cent tariff on Australian grapes is expected to severely limit the opportunity for large-scale programmes in 2015.
Should the FTA be approved in December, the double-reduction would lower the tariff to 21 per cent by the time fruit is being harvested, a rate at which Minnis said would be amicable for trade.
“It would give us a chance,” he explained. “A rate of 21 per cent is still high but I think there would be interest from South Korean importers because of Australia’s ability to airfreight and the fact that we are so much closer to the market than other Southern Hemisphere suppliers. I think exporters would be willing to send fruit there, even if they knew they weren’t going to make a huge profit. The tariff will eventually be eliminated so it is important to build strong export relationships.”
Grape exporters were on high alert over the weekend as hail storms swept through the Sunraysia region. While the storm caused significant damage to a number of properties that back onto the Murray River, Minnis said it would not derail the season.
“The damage varied. Some growers lost 5 acres, others lost 25; I know one grower who lost close to 100 per cent of his crop,” Minnis explained. “The storm seamed to follow the river. The areas worst hit grow a lot of the early season grapes for export. While it will cause a small hiccup for exporters, it’s nothing catastrophic. Unfortunately for the growers who have already spent a lot of time and money preparing their crop, it’s a big loss.”
