Fonterra’s exit from Australia ‘a major event’
Fonterra’s impending exit from the Australian dairy industry is a major event but the story doesn’t change too much for farmers.
The remainder comes from South Africa, Argentina, Australia and New Zealand.
Report co-author, Rabobank agricultural analyst Pia Piggott, says Chile’s exports are expected to continue to increase.
“We’re also expecting record cherry volumes across all other major Southern Hemisphere cherry exporters other than Australia,” she says.
“This will test how the ‘return to normal’ post Covid is working, and how the main export destination markets will behave. With China a key export market for Southern Hemisphere cherry producers, including New Zealand, all eyes will be on the Chinese market to see how the country’s continuing zero-Covid policy impacts demand.”
Piggott says New Zealand’s cherry industry remains relatively small with less than 1,000 ha of plantings, mostly in Central Otago. That compares with more than 2,500 ha in Australia.
However, New Zealand’s reputation for producing quality cherries means New Zealand cherries command high prices, second only to Japanese fruit.
“Cherries from New Zealand are predominantly bought as a luxury gift in celebration of the Chinese New Year,” Piggott adds. “With the largest export volumes going to Taiwan, followed by China, Vietnam and Thailand.”
She points out that New Zealand cherry exports have fallen in recent years due to La Nina weather conditions and Covid-related logistical issues.
“Over the next few years growing conditions should become more favourable as La Nina comes to an end in early 2023, and we expect to see New Zealand cherry production and export volumes improve from pandemic levels."
The Rabobank report says Southern Hemisphere cherry producers all face similar challenges in the form of increasing competition and narrowing margins due to elevated production costs.
“Chile, Argentina, and Australia are all moving in the same direction in terms of improving the efficiency in their processes, focusing on high-quality production, and diversifying their destination markets,” Piggott concludes.
