Armed with a hefty crop peaking on the sizes that India takes, Australian orange exporters are hoping to bounce back in that emerging market this year.
Australian oranges enjoyed a strong showing in the Indian market in the 2009 season, with industry statistics showing that more than 6,000 tonnes of navels were shipped between November 2008 and October 2009. That volume marked a more than six-fold increase on the same period of 2007/08, and was also well up on the previous two years when shipments reached around 1,500 tonnes.
Last season was a very lean year for Australian orange shipments to India, however, mainly because it yielded a light crop of inordinately large fruit. With this year’s crop peaking on small to medium fruit that fits India’s requirements, there are hopes of a revival.
“Because fruit size this year is quite small with a lot of fruit in the size range normally accepted by India, we are pleased they can take some reasonable volume,” said Neil Barker of Melbourne-based exporter BGP International. “It’s been a slow start, but I believe volumes will pick up in the next few weeks.”
Shipments to India only really got underway in the third week of June, around a month later than the 2009 season, and this will hinder efforts to match the significant volume shipped during that year, Mr Barker acknowledged. “That’s four weeks of the season lost and it’s a significant chunk when you consider we only go through to October.”
California oranges make splash
Besides a later-maturing crop this year, another factor stalling the start of Australian shipments has been the strong presence of California oranges in the Indian market. “Californian fruit has been much cheaper than ours, partly due to their much more favourable exchange rate,” said Mr Barker. “We’ve done a big programme out of California ourselves, shipping around eight to 10 containers a week.”
Tarun Arora of leading Indian importer IG International said California oranges have made a splash in the market this year. “The Californian season went really well,” he told Fruitnet.com. “I am not too sure about the total volume of California citrus coming over here but roughly speaking it would be around 400-500 container loads.”
Sunkist was the biggest beneficiary of the increased demand, he added, even though all its fruit was shipped by export brokers rather than by the citrus cooperative itself. “Of the oranges imported from the US, I’d estimate that around 70 per cent of them came from Sunkist,” said Mr Arora.
With supplies now transitioning to the Southern Hemisphere, Mr Arora is fairly optimistic about Australian prospects. “The Australian season has started well,” he said. “Our company has ordered 50 loads from one major packer-marketer there having done no business on Australian citrus last year.”
Nevertheless, he cautions that prices could come under pressure as volumes build up. “The pricing on oranges so far has been reasonable,” he said. “It’s not bringing big profits but it’s been high enough that no-one has made losses on oranges, but with the increased in supply, people might started to make some losses.'
Australian navels have been holding their own against competing new season fruit from South Africa in the price stakes, according to Mr Barker. “Our prices are similar on a per kg basis. South African navels are not cheap this year,” he noted. “They have quarantine hoops to jump through just the same as us and they have a smaller crop of larger fruit this year, which is not really suited to Indian demands.”
Quarantine hurdles
The quarantine protocol for shipping to India has been causing some issues for Australia as well this year. Findings of the mealybug pest in the South Australian Riverland and in the Sunraysia region centred on Mildura have resulted in high rejection rates for shipments from those areas. Nevertheless, Mr Barker noted that his company has been able to secure sufficient supplies from the Riverina area of New South Wales.
The quarantine protocol also incurs additional costs, particularly as India still requires onshore cold disinfestation at 1oC, whereas many other export destinations such as South Korea and Indonesia allow the process to completed in-transit at 3oC, according to Andrew Harty, GM of market development for Citrus Australia.
While noting that Biosecurity Australia is seeking to renegotiate the protocol to enable in-transit cold treatment at 3oC, Mr Harty pointed out that the added cost of treating fruit for India was a problem as this market doesn’t deliver high returns currently, with profits being marginal.
Mr Barker also acknowledged the constraints of the protocol. “The quarantine hurdles are hampering business as they add A$1-2 per carton to the asking price,” he said.
Despite the obstacles, Mr Harty added that India remains an important market, especially this year with the abundance of smaller fruit, while Ferdi Bergamin of major citrus grower-packer-marketer Mildura Fruit Company noted that it is providing a good growth curve.
Growth curve
While India’s fresh fruit import market is still heavily dominated by apples, orange imports have enjoyed rapid growth off a relatively low base in recent years. Orange import volumes almost doubled in 2009/10 to top 9,812 tonnes, up from 5,134 tonnes in 2008/09 while the value of shipments rose almost 60 per cent to garner US$6.51m.
“The demand `for imported oranges` from tier-2 cities has become stronger and the fruit is becoming more popular with consumers,” said Mr Arora. “For example our sales in the Nashik region have been very strong. Most of the fruit is still being used for fresh juices at home and not as a snack.”
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