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.
In a new report Rabobank says the majority of New Zealand’s avocado exports currently head to Australia and development of other export markets will be essential to ensure sustainable growth opportunities for the country’s producers as production climbs.
The Australian & New Zealand Avocado Outlook 2022 states that New Zealand’s avocado production is forecast to grow by an average 6% annually for the next five years, reaching 57,000 tonnes by 2026 — up from 44,000 tonnes in 2021.
“We expect the majority of this production growth will come from the Northland and Bay of Plenty regions,” says the report’s author, Rabobank associate analyst Pia Piggott.
“And while the general production trend will be in an upwards direction, we also anticipate this growth will be highly variable on an annual basis due to ‘alternate bearing’ which results in irregular crop loads from one season to the next.”
The report says New Zealand is highly reliant on Australia as an export market for avocados with our trans-Tasman neighbours accounting for 79% of total New Zealand exports over the last five years.
“New Zealand is well placed to supply the Australian market as it has a price competitive production base and is able to supply product during the periods in the season when Australian production drops,” Piggott said.
“However, Australian supply has ramped up considerably of late – particularly in Western Australia – leading to a national oversupply, and it’s essential that the New Zealand industry continues to grow its sales into other export markets that can pick up the slack when Australian import demand is lower.”
Piggott says the New Zealand avocado industry made significant progress growing sales to other markets in 2021, despite lower exports overall.
“New Zealand’s total avocado exports by volume were back by 11% in 2021, in large part due to an oversupply of avocados in Australia and the resulting drop in sales into this market,” she says.
While exports to Australia fell, strong growth was recorded in other export markets with avocado sales to the rest of the world (excluding Australia) up by 154%.
This included improved export sales into Singapore, Hong Kong and South Korea – with NZ exports making up 9%, 4% and 125 of total imports into those markets respectively – as well as strong export growth in markets like China, Thailand, Taiwan and India.
