Required Report - public distribution

**Date:** 9/30/2003

**GAIN Report Number:** AS3035

AS3035

**Australia**

**Canned Deciduous Fruit**

**Annual**

**2003**

**Approved by:**

![](media/image1.wmf)Andrew C. Burst, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Mike Darby, Agricultural Specialist

**Report Highlights:**

Weather conditions for the first half of CY 2003 were dominated by
widespread drought conditions across much of the Australian continent.
More normal precipitation has been received in the second half of CY
2003, and drought conditions appear to be breaking down. Cannery intake
for peaches in CY 2004 is forecast to increase. Post forecasts exports
of canned peaches in CY 2004 to fall significantly from the high levels
estimated for the previous year. Cannery intake for pears is forecast to
fall in CY 2004. Lower inventories are expected to trim exports from the
CY 2003 level.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Canberra \[AS1\]

\[AS\]

Table of Contents

[**SECTION I: SITUATION AND OUTLOOK
3**](#section-i-situation-and-outlook)

[General 3](#general)

[Weather Conditions 3](#weather-conditions)

[Canned Peaches 3](#canned-peaches)

[Production 3](#production)

[Exports 3](#exports)

[Consumption 4](#consumption)

[Imports 4](#imports)

[Canned Pears 4](#canned-pears)

[Production 4](#production-1)

[Exports 4](#exports-1)

[Consumption 5](#consumption-1)

[Imports 5](#imports-1)

[Policy 5](#policy)

[SECTION TWO: STATISTICAL TABLES 6](#section-two-statistical-tables)

[PS&D Tables 6](#psd-tables)

[Trade Matrices 7](#trade-matrices)

[Canned Peaches 7](#canned-peaches-2)

[Canned Pears 8](#canned-pears-1)

# SECTION I: SITUATION AND OUTLOOK

## General

### Weather Conditions

Weather conditions for the first half of CY 2003 were dominated by
widespread drought conditions across much of the Australian continent,
including the canning fruit areas of northern Victoria. However, as with
all deciduous fruit production, there have been almost no other major
weather events negatively impacting the crop. In some respects,
particularly related to the prevalence of pests and diseases, the crops
have benefited from drier conditions.

Good falls of rain have been received in the second half of CY 2003, and
drought conditions appear to be breaking down. Irrigation water
allocations for the CY 2004 crop are forecast at below average levels.
However, catchments have received rain recently and water supplies are
steadily improving. Furthermore, in the major peach and pear growing
regions, soil moisture levels are excellent and have allowed the summer
irrigation program to be delayed in order to conserve water supplies.

## Canned Peaches

### Production

Cannery intake of peaches for CY 2003 is forecast at 52,700 MT, up
slightly on the 50,200 MT recorded for the previous year. Widespread
drought conditions were offset by higher than anticipated water
allocations. Reduced pest and disease also improved production levels.

Cannery intake for peaches in CY 2004 is forecast to increase to 54,000
MT. Industry sources report that water allocations in areas where
canning peach production is concentrated are not expected to suffer
significantly from shortages of irrigation water supplies.

Post uses a conversion factor of 0.83 to determine actual canned peach
production. Canned peach production for CY 2003 is estimated at 43,741
MT, and forecast to increase slightly to 44,800 in line with industry
sources.

### Exports

Official ABS statistics have canned peach product exports at 18,370 MT
(shipped weight) for CY 2002. Post estimates this accounts for
approximately 11,573 MT in canning fruit equivalent. Post has used a
conversion factor of 0.63 to convert product shipped weight into actual
canning fruit. The conversion factor has been developed in cooperation
with local industry sources.

Post estimates exports of canned peaches for CY 2003 at 14,398 MT
(canning fruit equivalent), up 27 percent on the previous year.
Year-to-date figures for the first half of CY 2003 shows a surge in
export activity in the order of 50 percent. Industry sources suggest
that higher export demand has encouraged the liquidation of stocks. Post
anticipates that high export levels experienced for the first half of CY
2003 cannot continue into the second half as derivative figures show
inventories greatly depleted.

Post forecasts exports of canned peaches for CY 2004 to fall to around
10,000 MT, down significantly from the high levels estimated for the
previous year. Slightly higher forecast production is not likely to
compensate for greatly diminished closing stocks in determining export
availabilities.

### Consumption

Post estimates canned peach consumption for CY 2003 at 35,000 MT.
Consumption is forecast to remain unchanged in CY 2004 at 35,000 MT.
Official consumption figures are unavailable for canned fruit.
Consumption figures are estimated by Post with assistance from industry
sources.

### Imports

Post estimates canned peach imports at 344 MT (fruit equivalent) in CY
2003, down on the previous year and in line with the first half of CY
2003. Post has imports falling to 300 MT in CY 2004. Greece is usually
the principal supplier, with lesser amounts typically imported from New
Zealand, South Africa, China and Italy.

## Canned Pears

### Production

Post estimates cannery for pears in CY 2003 at 52,000 MT, up slightly on
the 50,000 MT recorded in the previous year. Despite widespread drought
conditions, a low incidence of pest and disease outbreaks combined with
improved water conservation techniques resulted in surprisingly high
production for CY 2003.

Cannery intake for pears is forecast to fall to 50,000 MT in CY 2004.
Drought conditions experienced in CY 2003 greatly reduced reserves of
irrigation water, and despite a breaking down in the drought cycle and
good soil moisture levels at present, Post expects that below average
irrigation water allocations will reduce production for CY 2004. Post
has assumed normal weather conditions and notes that below average
rainfall or extreme heat or high winds could reduce production
significantly.

Post uses a conversion factor of 0.83 to determine actual canned fruit
production. Canned pear production is estimated at 43,160 MT for CY
2003, and is forecast to fall to 41,500 MT in CY 2004.

### Exports

Official ABS statistics put exports of canned pear product in CY 2002 at
22,998 MT in shipped weight. Post estimates that this is equal to
approximately 14,489 MT of canning pears. Post uses a conversion factor
of 0.63 to convert shipped product weight into actual canning fruit.

Post estimates that exports of canning pears for CY 2003 will decrease
slightly to 14,450 MT. ABS figures for the first half of CY 2003 show a
strong surge in exports, but not in the order that was experienced by
canned peaches. Export demand is expected to fall significantly in the
second half of CY 2003, leaving total exports for the year slightly
under the previous year.

Exports of canned pears for CY 2004 are forecast to decrease to 12,700
MT. Slightly lower production and lower inventories are expected to trim
exports to around average levels.

### Consumption

Post estimates canned pear consumption for CY 2003 at 29,000 MT.
Consumption is forecast to remain unchanged in CY 2004. Official
consumption figures are unavailable for canned fruit. Consumption
figures are estimated by Post with assistance from industry sources.

### Imports

Post estimates canned pear imports at 254 MT (fruit equivalent) in CY
2003, double the previous year and in line with import data for the
first half of CY 2003. Post has imports falling to 200 MT in CY 2004.
South Africa and China are typical suppliers.

## Policy

Horticulture Australia Limited (HAL) is the horticulture industries
service provision organization, which replaced Australian Horticultural
Corporation (AHC) and the Horticultural Research and Development
Corporation (HRDC). HAL was established under corporations law as a
not-for-personal-profit company in accordance with the Memorandum of
Understanding (MOU) signed by 26 industry organizations. The focus of
the new company is the continued marketing and promotion of
horticultural products in both domestic and export markets, as well as
to exploit the opportunities for uptake and commercialization of new
technology.

The Australian canning fruit industry is a B-class member of HAL and
makes voluntary contributions, unlike the majority of horticultural
industries in Australia, which are A-class members and make
contributions through statutory levies. The canning fruit industry
remains one of the smallest contributors to HAL, receiving matching
funds from HAL for funds invested in research and development programs.

Australian Fruit Canneries have recently further rationalized into a
single organization. The three canneries formerly processing fruit in
Australia were SPC, Ardmona and Berri. According to industry sources,
SPC was the largest, processing around 50 percent of the peach crop and
around 54 percent of the pear crop. Ardmona was the other major
processor, processing around 41 percent of the peach crop and 46 percent
of the pear crop. Berri is a minor player and processes only about 9
percent of the peach crop.

SPC, a publicly listed company, and Ardmona, a grower owned cooperative,
merged in September 2001. The new company is now called \"SPC Ardmona
Limited\". The new company continues to be publicly listed. Ardmona,
which was previously a grower-owned cooperative, was sold to the new
company in exchange for cash and shares in the new company.

Industry sources suggest the reason behind the merger was that both
companies needed to increase their size in order to take advantage of
export opportunities. Also, each company had focused on different
aspects of production. In recent years SPC dramatically improved its
packaging and presentation of its product to enhance consumer
perceptions, while Ardmona improved its sorting capacity and improved
fruit quality. Industry sources believe these aspects of canned fruit
production complement each other and the merger will result in improved
efficiency and increased export opportunities.

# SECTION TWO: STATISTICAL TABLES

## PS&D Tables

+------------------+------+-------+------+-------+------+-------+------+
| Australia        |      |       |      |       |      |       |      |
|                  |      |       |      |       |      |       |      |
| #####            |      |       |      |       |      |       |      |
| # Canned Peaches |      |       |      |       |      |       |      |
+------------------+------+-------+------+-------+------+-------+------+
|                  | **20 | *     | **20 | **    | **20 | **    | **U  |
|                  | 01** | *Revi | 02** | Estim | 03** | Forec | OM** |
|                  |      | sed** |      | ate** |      | ast** |      |
+------------------+------+-------+------+-------+------+-------+------+
|                  | **   | *     | **   | *     | **   | *     |      |
|                  | USDA | *Post | USDA | *Post | USDA | *Post |      |
|                  | Offi | Est   | Offi | Est   | Offi | Est   |      |
|                  | cial | imate | cial | imate | cial | imate |      |
|                  | \    | \[Ne  | \    | \[Ne  | \    | \[Ne  |      |
|                  | [Old | w\]** | [Old | w\]** | [Old | w\]** |      |
|                  | \]** |       | \]** |       | \]** |       |      |
+------------------+------+-------+------+-------+------+-------+------+
| ####### M        |      | 01    |      | 01    |      | 01    | MM/  |
| arket Year Begin |      | /2002 |      | /2003 |      | /2004 | YYYY |
+------------------+------+-------+------+-------+------+-------+------+
| **Deliv. To      | 5    | 50200 | 5    | 52700 | 0    | 54000 | (MT) |
| Processors**     | 0000 |       | 3000 |       |      |       |      |
+------------------+------+-------+------+-------+------+-------+------+
| **Beginning      | 9600 | 9600  | 5802 | 7613  | 6292 | 2300  | (MT, |
| Stocks**         |      |       |      |       |      |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **Production**   | 4    | 41666 | 4    | 43741 | 4    | 44800 | (MT, |
|                  | 0670 |       | 3990 |       | 5000 |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **Imports**      | 500  | 420   | 500  | 344   | 200  | 300   | (MT, |
|                  |      |       |      |       |      |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **TOTAL SUPPLY** | 5    | 51686 | 5    | 51891 | 5    | 47593 | (MT, |
|                  | 0770 |       | 0292 |       | 1492 |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **Exports**      | 9386 | 11573 | 9000 | 14398 | 1    | 10000 | (MT, |
|                  |      |       |      |       | 1000 |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **Domestic       | 3    | 32500 | 3    | 35000 | 3    | 35000 | (MT, |
| Consumption**    | 5582 |       | 5000 |       | 5500 |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **Ending         | 5802 | 7613  | 6292 | 2300  | 4992 | 2400  | (MT, |
| Stocks**         |      |       |      |       |      |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+
| **TOTAL          | 5    | 51686 | 5    | 51891 | 5    | 47593 | (MT, |
| DISTRIBUTION**   | 0770 |       | 0292 |       | 1492 |       | Net  |
|                  |      |       |      |       |      |       | Wei  |
|                  |      |       |      |       |      |       | ght) |
+------------------+------+-------+------+-------+------+-------+------+

+-------------------+-----+------+-----+------+-----+------+-------+
| Australia         |     |      |     |      |     |      |       |
|                   |     |      |     |      |     |      |       |
| Canned Pears      |     |      |     |      |     |      |       |
+-------------------+-----+------+-----+------+-----+------+-------+
|                   | **  | **R  | **  | **Es | **  | **Fo | **    |
|                   | 200 | evis | 200 | tima | 200 | reca | UOM** |
|                   | 1** | ed** | 2** | te** | 3** | st** |       |
+-------------------+-----+------+-----+------+-----+------+-------+
|                   | **U | **   | **U | **   | **U | **   |       |
|                   | SDA | Post | SDA | Post | SDA | Post |       |
|                   | Of  | Esti | Of  | Esti | Of  | Esti |       |
|                   | fic | mate | fic | mate | fic | mate |       |
|                   | ial | \    | ial | \    | ial | \    |       |
|                   | \[O | [New | \[O | [New | \[O | [New |       |
|                   | ld\ | \]** | ld\ | \]** | ld\ | \]** |       |
|                   | ]** |      | ]** |      | ]** |      |       |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Market Year     |     | **0  |     | **0  |     | **0  | *     |
| Begin**           |     | 1/20 |     | 1/20 |     | 1/20 | *MM/Y |
|                   |     | 02** |     | 03** |     | 04** | YYY** |
+-------------------+-----+------+-----+------+-----+------+-------+
| ####### Del       | 52  | 5    | 51  | 5    | 0   | 5    | (MT)  |
| iv. To Processors | 000 | 0000 | 000 | 2000 |     | 0000 |       |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Beginning       | 4   | 4200 | 2   | 2338 | 0   | 2298 | (MT,  |
| Stocks**          | 200 |      | 960 |      |     |      | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Production**    | 43  | 4    | 42  | 4    | 0   | 4    | (MT,  |
|                   | 160 | 1500 | 330 | 3160 |     | 1500 | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Imports**       | 100 | 127  | 100 | 254  | 0   | 200  | (MT,  |
|                   |     |      |     |      |     |      | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **TOTAL SUPPLY**  | 47  | 4    | 45  | 4    | 0   | 4    | (MT,  |
|                   | 460 | 5827 | 390 | 5752 |     | 3998 | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Exports**       | 15  | 1    | 14  | 1    | 0   | 1    | (MT,  |
|                   | 500 | 4489 | 000 | 4454 |     | 2700 | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Domestic        | 29  | 2    | 29  | 2    | 0   | 2    | (MT,  |
| Consumption**     | 000 | 9000 | 000 | 9000 |     | 9000 | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **Ending Stocks** | 2   | 2338 | 2   | 2298 | 0   | 2298 | (MT,  |
|                   | 960 |      | 390 |      |     |      | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+
| **TOTAL           | 47  | 4    | 45  | 4    | 0   | 4    | (MT,  |
| DISTRIBUTION**    | 460 | 5827 | 390 | 5752 |     | 3998 | Net   |
|                   |     |      |     |      |     |      | We    |
|                   |     |      |     |      |     |      | ight) |
+-------------------+-----+------+-----+------+-----+------+-------+

## Trade Matrices

### Canned Peaches

+--------------------+-------------+--------------------+-------------+
| Export Trade       |             |                    |             |
| Matrix             |             |                    |             |
|                    |             |                    |             |
| Canned Peaches     |             |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Time Period**    | **Jan -     | **Units:**         | **MT**      |
|                    | Dec**       |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Exports for:**   | **2002**    |                    | **2003**    |
+--------------------+-------------+--------------------+-------------+
| U.S.               | 2494        | U.S.               | 274         |
+--------------------+-------------+--------------------+-------------+
| *Others*           |             | *Others*           |             |
+--------------------+-------------+--------------------+-------------+
| New Zealand        | 4175        | New Zealand        | 5756        |
+--------------------+-------------+--------------------+-------------+
| Canada             | 3943        | Canada             | 3192        |
+--------------------+-------------+--------------------+-------------+
| Japan              | 2544        | Japan              | 1532        |
+--------------------+-------------+--------------------+-------------+
| The Netherlands    | 806         | The Netherlands    | 712         |
+--------------------+-------------+--------------------+-------------+
| Singapore          | 708         | Thailand           | 633         |
+--------------------+-------------+--------------------+-------------+
| United Kingdom     | 652         | United Kingdom     | 593         |
+--------------------+-------------+--------------------+-------------+
| Malaysia           | 580         | Malaysia           | 467         |
+--------------------+-------------+--------------------+-------------+
| The Philippines    | 388         | The Philippines    | 444         |
+--------------------+-------------+--------------------+-------------+
| Thailand           | 360         | Singapore          | 384         |
+--------------------+-------------+--------------------+-------------+
| Chile              | 320         | Belgium            | 327         |
+--------------------+-------------+--------------------+-------------+
| ######             | 14476       |                    | 14040       |
| # Total for Others |             |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Others not       | 1400        |                    | 974         |
| Listed**           |             |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Grand Total**    | **18370**   |                    | **15288**   |
+--------------------+-------------+--------------------+-------------+
| ######### NB. 2    |             |                    |             |
| 003 figures - part |             |                    |             |
| ial year Jan - Aug |             |                    |             |
+--------------------+-------------+--------------------+-------------+

### Canned Pears

+--------------------+-------------+--------------------+-------------+
| Export Trade       |             |                    |             |
| Matrix             |             |                    |             |
|                    |             |                    |             |
| Canned Pears       |             |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Time Period**    | **Jan -     | **Units:**         | **MT**      |
|                    | Dec**       |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Exports for:**   | **2002**    |                    | **2003**    |
+--------------------+-------------+--------------------+-------------+
| U.S.               | 1039        | U.S.               | 4551        |
+--------------------+-------------+--------------------+-------------+
| *Others*           |             | *Others*           |             |
+--------------------+-------------+--------------------+-------------+
| Germany            | 5415        | United Kingdom     | 4955        |
+--------------------+-------------+--------------------+-------------+
| United Kingdom     | 5021        | Germany            | 2294        |
+--------------------+-------------+--------------------+-------------+
| Japan              | 3161        | Japan              | 2044        |
+--------------------+-------------+--------------------+-------------+
| Canada             | 2998        | Canada             | 2004        |
+--------------------+-------------+--------------------+-------------+
| New Zealand        | 98          | The Philippines    | 679         |
+--------------------+-------------+--------------------+-------------+
| Denmark            | 984         | New Zealand        | 603         |
+--------------------+-------------+--------------------+-------------+
| Norway             | 891         | Sweden             | 530         |
+--------------------+-------------+--------------------+-------------+
| Thailand           | 501         | Norway             | 510         |
+--------------------+-------------+--------------------+-------------+
| Sweden             | 383         | Denmark            | 501         |
+--------------------+-------------+--------------------+-------------+
| The Netherlands    | 351         | Thailand           | 359         |
+--------------------+-------------+--------------------+-------------+
| ######             | 19803       |                    | 14479       |
| # Total for Others |             |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Others not       | 2156        |                    | 1205        |
| Listed**           |             |                    |             |
+--------------------+-------------+--------------------+-------------+
| **Grand Total**    | **22998**   |                    | **20235**   |
+--------------------+-------------+--------------------+-------------+
| ######### NB. 2    |             |                    |             |
| 003 figures - part |             |                    |             |
| ial year Jan - Aug |             |                    |             |
+--------------------+-------------+--------------------+-------------+