Sugar Price– ‘Sugar price slightly down to 14.20 US cents/ pound ‘
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Sugar Price– ‘Sugar price slightly down to 14.20 US cents/ pound ‘
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World apple production has grown considerably since 2000 due to large increases in world wide yields – particularly in China which now accounts for 50% of global production which is likely to be 80 million tonnes in 2017. World production is likely to continue to grow given Chinese yields are still relatively low at around 22 t/ha.
Southern Hemisphere producers including Australia account for just 8.4% of global production. Apple production is largely stagnant post 2000 and in Australia’s case still remains below 2003 output levels. South Africa, Brazil, Australia & New Zealand all have clear growth profiles post 2007.
The Australian industry is characterised by fewer growers (40% reduction post 2000) and increasing yields (APAL model orchard 47t/ha in 2015), low exports and low imports. Labour costs have grown considerably for Australian apple businesses post 2008 and these costs appear to have been accommodated only by the significant improvements in orchard yields (65% increase post 2008)(APAL model orchard).
Australian apple imports remain stagnant post 2010 relaxation of quarantine restrictions. Exports increased 115% in 2015 to 3615 tonnes but remain at very low levels compared to 2002 (over 30 000 tonnes).
Western Australian apple industry producers represented 9% of national crop & the industry is comprised of 220 growers (an increase of 23% since 2008). Production remains largely stagnant recording a small decline post 2007.
Apple consumption in Australia remains a point of conjecture with the peak apple body (APAL) recording it as 7.98Kg in 2014/15 whilst USA private apple industry researchers Belrose Inc recorded 11.28Kg (with a strong growth profile post 2000). The APAL methodology appeared to be more superficial but it is not clear what conclusions can be drawn here.
World Apple Production
A macro perspective on the Australian apple industry begins with an analysis of global production. The World Apple Review (Belrose Inc. 2016) provides a number of useful insights into the state of the industry globally along with supporting statistics. Reliable data can also be sourced from the USDA (USA Dept Of Agriculture) and APAL (Australian Apple & Pear Industry). The Food & Agriculture Organisation of the UN (UN FAO) appears to be the primary data source for these organisations.
According to the most recent official data in 2013 the global output was 64 million tonnes (UN FAO stat). 2016/17 production is forecast to increase to 77 million tonnes (USDA, Dec 2016) although other sources have this forecast considerably higher at 85 million tonnes (Belrose Inc 2016 p17). Total world apple production is estimated to have grown by 44 percent between 2000 and 2015. Production in China more than doubled during this period whilst the rest of the world grew by just 8.5%. China represents almost 50% of world production.
Australia accounted for just 0.35% of the global crop in 2013 and the industry’s small comparative size is illustrated below.
The total area harvested is 5,071,000 hectares and which is 17% below 1995 levels (Belrose 2016 p14). It has grown modestly since 2005 when China began to increase plantings again followed by the rest of the world in 2008 (Belrose 2016 p14). Sharp decreases were recorded from 1995 following economic problems throughout South East Asia during that period. (Belrose 2016 p14.)
Huge Boost from Rising Apple Yields
Since it is clear that total planted acreage has declined since 1995 it follows that the increases in global apple production have occurred due to increasing yields. Producing countries worldwide have seen smaller growers leave the industry and increased concentration of production in large, well-financed integrated producers (Belrose 2016 p15). Marginal plantings have been removed and increased density plantings undertaken in best suited areas.
The 2014 world average yield was 16.75 tonnes per/h. Between 2000 & 2013 average apple yields have; increased by 42% (avg) worldwide, increased by 127% in China, increased by 22% excluding China. (Belrose 2016 p16) & (Factfish website).
World Apple Consumption
World per capita apple consumption trends are infrequently published by the UN FAO but market researcher Belrose Inc produces unofficial estimates based on the following formula;
– Fresh apple consumption = Total apple production + Fresh apple imports
– Fresh apple exports – Apples for processing – Withdrawals from market
Analysis from 2001-2015 by Belrose Inc includes the table below which highlights an upward bias to consumption in almost all selected countries including significant increases in Australia (75% post 2001) and China with a stunning 5.5 fold increase to 26kg in two decades.
Other data recorded EU 11 countries with an average of 15.52kg (decline of 7% from 2001 level) and the UK at 9.75kg- an increase of 5.4% from 2001 level but still below 1992 levels). Many countries in the middle east and latin america had stable, low consumption levels and the author’s general conclusion was that aside from China’s impressive growth, consumption levels in major producing countries had stagnated. (Melrose Inc p 93).
World Apple Trade
World trade of fresh apples grew strongly from 2000-2010 and has since stagnated at around 8.4 million tonnes. This is largely attributed to the global financial crisis and associated economic downturn (Belrose Inc 2016)
Key factors influencing world trade in apples in 2017 include ongoing Russian ban on imports from select countries. Russia is the world’s largest importer but in 2015 total imports were expected to be 40% below 2013 levels equating to a reduction of over 500,000 tonnes. (Belrose Inc p74).
China’s recent large increase in exports also has industry commentators suggesting this may be a government policy shift following a few years of slower economic growth and softening of domestic demand for apples. (Belrose Inc p74)
Australian exports are largely insignificant by global levels but recent sharp increases provide cause for optimism that development of a longer term sustainable market may be achievable. This would be a first order boost to domestic growers.
World Apple Production – Key Points
Southern Hemisphere Producers
In any export scenario Australia must firstly compete with temperate climate countries in the southern hemisphere seasonal window including Chile, Brazil, Argentina, South Africa and New Zealand. Southern Hemisphere producers accounted for just 8.4% of total global production in 2013 & 7% in 2016 (SH actuals vs world est output). (WAPA, Feb 2015)
The table below (WAPA, Feb 2015) illustrates Australia’s comparatively small production relative to key competitors. Note that Brazil (24%), South Africa (27%), Australia (16%) & New Zealand (26%) recorded
Australian Apple Industry
As mentioned earlier Australian production has a growth profile post 2007 but 2015 production is still 4-5% below 2003 levels.
The industry is characterised by; small and largely stagnant production grown predominantly for fresh consumption (73%) (juicing 21%), declining number of growers, increasing yields, low imports and low exports. From 2000-2014 total land harvested increased 2% to 20098 hectares (UN FAO stat).
The varietal mix for Australian growers is dominated by Cripps Pink (36%), Royal Gala (20% and Granny Smith (18%).
Australian Orchard Business Performance – A Closer Look
Whole of industry data can be skewed by smaller, more marginal orchards and businesses so it is useful to examine some key findings of The Orchard Business Analysis by Ag First (2015). The report is published by APAL and was conducted in 2015 for the seventh time since 2008. It is a based on data from 27 orchard businesses across Australia. The model assumes a 115ha property of which 40 hectares is planted.
Some key findings from the 2015 report include;
Labour costs continue to be a major issue for Australian producers with above chart showing large increases across all categories except management.
The chart above shows the negligible increase in labour cost per gross kilo from 2008-2015. Large increases in yield have enabled producers to absorb higher general labour costs through economies of scale across their businesses.
Australian Imports/ Exports
Australian apple imports remain low despite a spike following introduction of bio security protocols for imports from NZ in 2010/11.
Australia apple exports fell into a sharp decline post 2003 & have not recovered. Currently 1-2% of total class 1 production is exported & the leading markets for Australian apples in 2015 were Papua New Guinea, UK, Indonesia, United Arab Emirates and Thailand. Small volumes were also supplied to other Asian markets including Singapore, Hong Kong, China and Taiwan. (Source; APAL 2017)
West Australian Apple Production
Producers represented 9% of national crop in 2015 with 25735 tonnes valued at $53.4 million. The industry is comprised of 220 growers an increase of 23% since 2008 (178 growers). (FruitWest2017)
WA production is largely stagnant recording a decline from 2007/08 production of 29307 tonnes (Fruit West 2017).
Apple Consumption (Conflicting Data)
Data for this report was accessible and easy to compile through various online sources – particularly APAL & Belrose Inc. The statistics from both sources consistently matched except for a key measurement- Australian apple consumption. This is very unfortunate given its importance.
The APAL statistician was not able to shed any light on the discrepancy (7.98kg vs 11.28kg) other than to state that the APAL data was based on levy data & that the Belrose Inc formula included imports and market withdrawals which APAL did not include.
Australian apple Industry -Update 2020
Worth over $580 million annually to the national economy, Australia’s apple and pear industry produces more fruit for fresh produce consumption than any other fruit industry in Australia. (Source; APAL, 2020).
For the year 2017-18, Australia’s apple industry was valued at nearly $490 million. There are over 500 commercial apple and/or pear growers in the country. All states produce apples.
In 2017-18, Australians ate an average of 10.1kg of apples per year which amounts to more than one apple a week. Australia currently exports 1-2 per cent of our total marketable production of apples and below apple production and export graphs indicate there is no discernible growth trend in either (Source APAL and ABS; 2020).
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