Australian fruit and vegetable growers could face $263 million in losses this summer due to the reduced export airfreight capacity impacted by the COVID-19 pandemic, a new report from Hort Innovation has found.
The report, Understanding export supply chain logistics, matching production and export aspirations with airfreight capacity, found that airfreight capacity will not meet the needs of key export markets for the 2020/21 financial year. It may lead to an oversupply of products in the domestic market, which will reduce the farm gate prices and create financial losses for growers.
It is projected around 83,000 tonnes of airfreight capacity is needed for the year, with fruit accounting for 72.9 per cent of the total, and 27.7 per cent for vegetables.
Singapore, Hong Kong, China, United Arab Emirates and Malaysia are the five key markets accounting for 80 per cent of the total anticipated airfreight requirements.
“There is a larger impact on the fruit category (than for vegetables) with profitability of fruit growers who are reliant on airfreight falling by a minimum of $263 million or 32.5 per cent on an annual basis,” said Hort Innovation general manager marketing and international trade Justine Coates.
“Restricted access to airfreight and increased prices will impact horticultural export volumes and divert them to the domestic market – driving down prices. This is especially the case for growers of cherries, summerfruit, mangoes and some vegetables, who have dedicated export supply chains reliant on airfreight.”
It is estimated that without access to airfreight for those reliant on it, losses of $5.7 million for the vegetable sector and $300 million for the fruit sector are expected for the year ahead.
“A second phase of this research is starting that looks into how to overcome these challenges and how sea-freight can potentially fill the gap posed by reduced airfreight for some product, for others this may not be possible,” said Coates.
“It’s important to note that movement of data is extremely active and data represented as part of this report is correct at this point in time only.”
Woolworths reveals round four recipients
Meanwhile, Woolworths has had announced its third funding round of its Woolworths Organic Growth Fund to allow organic fruit and vegetable growers to upgrade production systems and develop expansion plans.
Four successful recipients were named in the round, including Cantrill Organics, Kalafatis Fresh Produce, Wattle Organic Farms and Prime Organics.
Woolworths general manager of fruit and vegetables Paul Turner said customer demand for organic fruit and veg continues to grow at around 20 per cent a year.
“We’re working in close partnership with local farmers to ensure we can meet the growing demand with Aussie grown products,” said Turner.
“In this round, we’re backing four more hard-working and entrepreneurial Australian farming families, with another $1 million in investment through the Organic Growth Fund.”
“This includes a $500,000 grant for the Kalafatis family to branch out into organics. The Kalafatis family has been a trusted supply partner to Woolworths for more than 50 years in the conventional space, and we’re excited to be deepening our partnership.”
The $30 million fund was established in 2018 in partnership with Heritage Bank.
Applications for the fourth round of the Woolworths Organic Growth Fund are now open and close on 11 October 2020.