Australian growers are facing A$263m (US$292m) in losses over the next year because of a reduction in airfreight capacity, caused by the Covid-19 pandemic.
A research report commissioned by Hort Innovation showed reduced capacity is expected to continue until at least June 2021, preventing growers from meeting the demands of export markets and potentially leading oversupply of products to the domestic market.
The report highlighted reduced airfreight capacity across all port locations, the limited number of planes exiting Australia and the increased cost of airfreight — at times this has been estimated to be up to eight times pre-COVID-19 levels.
Beyond capacity, the report noted how Covid-19 had reduced ability to communicate with in-market partners and created uncertain social, political and economic conditions.
The report predicted in the 2020/21 financial year (ending 30 June) around 83,000 tonnes of airfreight capacity will be required, fruit accounts for 72.9 per cent of this while vegetables account for 27.7 per cent.
Justine Coates, general manager marketing and international trade of Hort Innovation said fruit growers would be hit particularly hard.
“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,” Coates said.
“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 A$263m or 32.5 per cent on an annual basis.”
The report outlines a worst-case scenario of no airfreight that shows the impact on annual industry profitability could see downturns of 82 per cent for asparagus, 66 per cent for summerfruit, 62 per cent for cherries, 50 per cent for carrots and 42 per cent for mangoes.
“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,” Coates added.
