Chinese sales sweeten citrus future

China is Australia's most valuable export market for mandarins and the fourth largest market by volume and value for oranges.

Australian citrus exports to China were valued at $21 million in 2013 - $13m in oranges and $8.5m worth of mandarins - in a market where Australia had relatively no presence as recently as 2011.

Speaking at the Citrus Australia SA Regional Forum in Waikerie on Monday, Mr Harty said early indications were that these levels were likely to skyrocket in 2014.

"In order to send fruit to China, growers have to register and be certified under our KCT - standing for Korea, China, Thailand - program," Mr Harty said.

"All the predictions - based on all the blocks that have been registered under the KCT program - this coming year is that volume will actually double, and potentially more than double.

"China is now our third biggest market and potentially this season or next season it will become our biggest market."

Mr Harty said the Chinese market presented a growth opportunity on a scale the industry had never seen before.

"This market gets me hugely excited. I'm not overstating it when I say I don't think our industry has ever, in its history, been presented with such an exciting market prospect as China," he said.

"It's a massive market - in fact it's many, many markets. This is a multi-segmented market, with many cities that have a higher population than Australia does and increasingly wealthy people.

"They all love navel oranges, and they all place huge value on imported product because they have a food safety crisis in their country with their domestic farming. Last year there was a survey done of the residents of Shanghai, and 73pc of them said they rated their domestic product either unsafe or very unsafe.

"The message for us is - keep our products safe and don't skimp on the compliance we do with spraying, withholding periods and residue testing."

The predicted export expansion would continue the extraordinary growth achieved in China in recent times. In 2012, total citrus exports to China were valued at $5.4m, but last year 9100 tonnes of Australian oranges were exported to the world's most populous nation last year - an increase of 288 per cent by volume and 392pc in value compared to 2012. Oranges attracted an average price of $1.42 a kilogram, the third highest average price behind South Korea and Papua New Guinea.

Mandarin exports to China in 2013 weighed in at 4560t with a total value of $8.48m - a rise in value of more than 200pc in just 12 months.

Despite the total volume of Australian citrus exports falling 2pc in 2013, the total value of exported citrus rose 3pc to $194.9m.

Trade deals with South Korea and Japan have also buoyed citrus producers, with a gradual reduction in tariffs in these nations likely to lift returns and make Australian fruit more price competitive.

While the outlook for exports appears rosy, Mr Harty emphasised that increased investment was needed to protect Australia's reputation as a producer of safe, high-quality fruit. He detailed Citrus Australia's push for an increase in citrus levies to fund research and development and biosecurity efforts.

"It's been a very long time since we had a levy increase - the last increase was in 1999 when the GST was introduced and John Olsen was premier of SA," he said.

"Government agencies have been reducing their contributions, and we've seen research centres closing, reducing our R&D capabilities.

"Also, since levies are collected on a per tonne basis and the national crop has gone from 800,000t in 1999 to 600,000t now, there's less money being collected."

Growers currently pay between $2 and $2.75 in levies - depending on the crop - with the proposed increase lifting this by $1.50.

A national ballot on the proposed changes will be conducted in September.

One of a series of regional forums held in key growing regions, the Waikerie event got off to a lively start, with an at-times heated discussion regarding funding allocations and transparency within Citrus Australia.

* Full report in Stock Journal, April 17, 2014 issue.