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Aussie growers facing $263m losses this summer due to COVID-19
Publication date: August 10, 2020

EXPORT AIRFREIGHT capacity for the Australian horticulture sector has undergone severe disruption due to COVID-19 and is expected to continue until June 2021, and potentially beyond. A research report commissioned by Hort Innovation shows that airfreight capacity will not meet the needs of key export markets. This may lead to oversupply of products to the domestic market, reducing farm gate prices and creating financial losses for Australian growers.
The research report conducted by the Centre of International Economics highlighted the changes to airfreight due to COVID-19 being:
The research also highlighted:
The report focuses on the 2020/21 financial year. It is projected that around 83,000 tonnes of airfreight capacity will be required this year:
Singapore and Hong Kong have the highest airfreight requirements followed by China, United Arab Emirates and Malaysia. These five markets account for 80 per cent of the total anticipated airfreight requirements across Australian fruit and vegetables for the 2020/21 year.
Product moving out of Melbourne, Sydney and Brisbane accounts for 79 per cent of the total airfreight requirement over the 12-month period.
The December/January period is a peak demand period for airfreight in normal operating conditions which accounts for 30 per cent of the total requirement over 12 months.
Hort Innovation General Manager Marketing and International Trade Justine Coates said, “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.”
“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.”
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.
The report states that without access to airfreight the airfreight-reliant vegetable and fruit sectors face estimated losses of $5.7million and appox. $300 million respectively for the 2020/21 financial year.
Justine said, “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.
“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.”
More information:
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