By Georgia Devenish - Agricultural Research Analyst at JLL
The Australian Government has announced a $170 million support package for the international export sector to deal with COVID-19-driven supply chain interruptions. The funding includes a $110 million International Freight Assistance program, the waiver of $10 million in Commonwealth fishery fees and the addition of $49.8 million into the Export Market Development Grants program for the 2019/20 financial year.
Former Toll Holdings managing director and former Linfox chief executive, Michael Byrne, has been appointed to oversee the International Freight Assistance program. Under the program fresh produce will be delivered to China, Japan, Hong Kong, Singapore and the United Arab Emirates. On the return flights, there will be capacity for the transport of medical supplies, medicines and equipment, which will be critical to the ongoing health response.
The avocado industry has been smashed by COVID-19. The closure of cafes and restaurants have led to a steep decline in demand which has been echoed by falling fruit prices. After a dismal week, it appears the market has settled slightly but concern is rife within the industry. The avocado harvesting season soon switches from Shepard (green-skinned variety) to Hass (smaller, black-skinned) and premium-grade fruit prices are expected to continue slipping as the Australian harvest peaks. An abundance of supply with fewer markets to sell into may soon see retailers selling avocados by the kilogram - good news for smashed avo fans out there!
The story of the Australia rice industry is quite a different one to that of avocados. There has been a surge in consumer demand while supply remains restricted on the back of drought conditions in the Riverina. Last year's production was 54,000 tonnes (second lowest on record) in comparison to 600,000 - 800,000 tonnes that can be produced in an average year.
Sunrice Group chief executive officer, Rob Gordon, said the company was "producing stock as quickly as possible from our rice processing and packing facilities in the Riverina of New South Wales, however, demand for products is currently exceeding supply capability." To meet the demand spike induced by COVID-19, SunRice Group will look towards its international supply capability to source high-quality rice from international sources to temporarily supplement supply to the Australian market.
This week the Australian Competition and Consumer Commission (ACCC) announced it would not oppose Asahi Group Holdings’ proposed $16 billion acquisition of Carlton & United Breweries (CUB). The approval comes with the condition that Asahi must divest two beer and three cider brands. The cider brands Strongbow, Bonamy’s and Little Green cider brands and the Stella Artois and Beck’s beer brands are to be sold. The future buyer or buyers of these assets will need to be approved by the ACCC. In a statement Asahi said it welcomed the announcement.
In Australia, Asahi’s beer brands include Asahi Super Dry, Peroni, Cricketers Arms, Grolsch, Mountain Goat, and Two Suns. In cider, Asahi licences Somersby cider (from Carlsberg).
CUB’s beer brands include Victoria Bitter, Carlton Draught, Fat Yak, Crown Lager, Foster’s and Balter. CUB also licences and distributes a range of other beer brands including Corona, Stella Artois, Beck’s and Budweiser. CUB’s cider range includes Strongbow, Mercury, Bonamy’s, Little Green, Spring Cider Co., Dirty Granny and Pure Blonde Cider. CUB also manufactures and distributes Bulmers under licence from Heineken.
ABARES' March Water Market Outlook report provides an initial outlook for water allocation prices in the southern Murray-Darling Basin for 2020/21. This outlook uses forecasts provided by state water agencies for allocations, and seasonal conditions from the Bureau of Meteorology (BOM).
Also released by ABARES this week is their MDB Water Market Dataset. ABARES collaborated with BOM, Australian Bureau of Statistics, Murray-Darling Basin Authority and each of the state water agencies to compile the data set which outlines water availability, market outcomes, irrigation activity, climatic conditions and commodity prices for a consistent set of catchment regions in the Murray-Darling Basin.
Hort Innovation (a grower-owned, not-for-profit research and development corporation) has released its Australian Horticulture Statistics Handbook 2018/19. The publication includes an analysis that combines all available data on production, international trade, processing volumes and fresh market distribution in order to produce statistics on 75 horticultural categories. The 2018/19 edition also features additional data, demonstrating the share of fresh supply volumes to both retail and food service for fruit and vegetable categories.