Required Report - public distribution

**Date:** 11/23/2005

**GAIN Report Number:** AS5042

AS5042

**Australia**

**Citrus**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Kathleen Wainio, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Mike Darby, Agricultural Specialist

**Report Highlights:**

Fresh orange production in 2006/07 is forecast at 550 TMT, down slightly
on the revised number for the previous year. Production of fresh oranges
for 2005/06 is estimated at 571 TMT, as above average seasonal
conditions following years of drought led to a sharp increase in
production. Orange juice imports in 2005/06 are estimated at 40,000, up
sharply on a surge in imports from Brazil which now accounts for 95
percent of Australia's import supply. In October 2005, Australia
announced an import protocol with China which covers all major
commercial varieties of citrus fruit, including oranges, mandarins,
lemons and grapefruit.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Canberra \[AS1\]

\[AS\]

Table of Contents

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

[General 3](#general)

[Fresh Oranges 3](#fresh-oranges)

[Production 3](#production)

[Exports 3](#exports)

[Imports 4](#imports)

[Consumption 4](#consumption)

[Orange Juice 5](#orange-juice)

[Production 5](#production-1)

[Exports 5](#exports-1)

[Imports 5](#imports-1)

[Consumption 6](#consumption-1)

[Quarantine 6](#quarantine)

[Industry Organization 6](#industry-organization)

[Australian Citrus Protocol With China
6](#australian-citrus-protocol-with-china)

[SECTION TWO: STATISTICAL TABLES 8](#section-two-statistical-tables)

# SECTION ONE: SITUATION AND OUTLOOK

## General

Above average weather conditions in the lead-up to harvesting the
2005/06 crop have greatly improved estimated production. This recovery
follows years of prolonged drought. Increased rainfall greatly improved
soil moisture levels as well as increasing reserves of irrigation water.
This change in weather conditions has allowed production in 2005/06 to
rebound to levels experienced prior to the drought.

Improved weather conditions in 2005/06 combined with Post's assumption
of average weather conditions in the lead up to harvesting the 2006/07
crop have provided a forecast production level consistent with the
historical long-term average. A sudden return to drought conditions, or
a continuation in above average conditions, will likely result in a
revision of Post's 2006/07 forecast.

## Fresh Oranges 

### Production

Fresh orange production in 2006/07 is forecast at 550 TMT, down slightly
on the revised number for the previous year. This forecast assumes
average weather conditions and remains largely in line with the
long-term average establishing using ABARE historical data. Recent
drought conditions have created a downward trend for production however
post has assumed that, for the foreseeable future, drought conditions
have abated and that production in 2006/07 is likely to remain above the
established trend line, at around the ten year average.

Production of fresh oranges for 2005/06 is estimated at 571 TMT, up
sharply on the number previously reported by post (AS #4041). Above
average seasonal conditions in the lead up to harvest, following years
of drought, is responsible for the sharp increase in production.

Improved seasonal conditions have greatly increased irrigation water
supplies as well as soil moisture. Post anticipates that fresh orange
production is likely to remain at levels more reflective of those prior
to that drought which commenced in 2001/02.

## 

![](media/image2.wmf)

*Source: ABARE data (July June)*

### Exports

Exports of fresh oranges for 2006/07 are forecast at 115 TMT, down on
the revised figure for the previous year. Despite this fall, this
forecast would reflect the long-term average for orange exports.

Fresh orange exports for 2005/06 are estimated at 125 TMT, up sharply on
the number in posts previous report. Sharply increased production levels
have lead to exports surpassing posts previous expectations. Despite
this estimate being above the long-term average for exports, it remains
in line with the long-term trend of increased exports as a percentage of
the total crop.

The United States remained Australia largest export market for fresh
oranges in 2004/05, receiving 21 percent (22 TMT) of total exports (106
TMT). Asian markets accounted for the next four largest destinations and
55 percent of total exports.

![](media/image3.wmf)

*Source: ABARE data (July June)*

### Imports

Imports for 2006/07 are forecast at 17 TMT, up on the revised figure for
the previous year. Imports of fresh oranges for 2004/05 are estimated at
15 TMT, up sharply on the figure previously reported by post. As imports
represent a relatively small portion of domestic consumption, Post
anticipates continued import growth beyond the forecast period, despite
little change in domestic consumption.

Imports of fresh oranges for 2004/05 reached nearly 17 TMT. The United
States supplied around 95 percent of these imports.

### Consumption

Fresh domestic consumption for 2006/07 is forecast at 49 TMT, unchanged
the estimated for the previous year.

Official consumption figures are no longer available. Figures reported
by post are derived from production and export numbers.

## Orange Juice

### Production

Australian orange juice production for 2006/07 is forecast at 16,923 MT.
This figure assumes deliveries to processors in the order of 220,000 MT
with post using a conversion factor of 13 to convert orange deliveries
to orange juice production. Lower production of fresh oranges in 2006/07
is expected to lower the availability of fresh oranges for processing.
Production of orange juice for 2005/06 is estimated at 17,385 TMT, up on
the figure previously reported by post.

Orange juice production in Australia is believed to be in long-term
decline. Competition from cheaper imported juice from countries such as
Brazil has placed downward pressure on local juice production. This
trend is evidenced in the long-term decline in Valencia production, a
variety that has traditionally made up the majority of oranges supplied
for processing. Historical ABARE figures have Valencia production
falling while Navel orange production continue to climb.

![](media/image4.wmf)

*Source: ABARE data (July June)*

### Exports

Australian orange juice exports for 2006/07 are forecast at 2500 MT, up
on the revised figure for the previous year. If achieved, exports will
account for less than 15 percent of total production, despite the
forecast increase. The reduction in Valencia production over the past
decade is likely to continue beyond the forecast period and this is
likely to reduce supplies of oranges suitable for processing and export
as juice.

### Imports

Imported citrus juice in 2006/07 is forecast at 34,000 MT, down on the
revised estimate for the previous year. Despite this fall, if achieved
this would represent a historically high figure.

Imported orange juice in 2005/06 is estimated at 40,000, up sharply on
the figure previously reported by Post. A surge in imports from Brazil,
has effectively accounted the entire upward revision. Brazil now
accounts for 95 percent of Australia's import supply. Argentina accounts
for just over one percent while the US accounts for less than one
percent.

### Consumption

Orange juice consumption in 2006/07 is forecast at 49,000 MT, unchanged
from the revised figure for the previous year. Official consumption
figures for orange juice are no longer available. Figures quoted by post
are derived from production and trade numbers.

## Quarantine 

[Canker outbreak:]{.underline} On July 6, 2004, Australian authorities
confirmed the detection of citrus canker in an orchard in Emerald, a
relatively remote area in central Queensland. Legislation was introduced
to establish a quarantine zone around the outbreak site. On October 8
2004, a second outbreak was confirmed, although this property was also
located within the legislated quarantine zone.

Australia has declared itself to be free of citrus canker, despite
experiencing periodic outbreaks. The first outbreak occurred in the
Northern Territory in 1912 and subsequent outbreaks were discovered in
1991 and 1993. Queensland experienced its first outbreak on Thursday
Island in 1984 and then most recently on the mainland in July of 2004.

[U.S. citrus]{.underline}: Currently, citrus from Florida is not allowed
access to the Australian market, due to pests of quarantine concern.
Biosecurity Australia, the government organization responsible for
quarantine policy, released a draft policy (Draft Import Risk Analysis
Report) for the importation of citrus from the U.S. state of Florida in
July 2003. Technical negotiations to address possible disease concerns
are ongoing. Gaining access for Florida citrus into the Australian
market is a priority for the United States.

Most U.S. citrus now entering Australia is sourced from California.
Under current import protocols, U.S. citrus must be certified pest and
disease free.

## Industry Organization

Levies are assessed to fund citrus research and development (R&D) and
market development activities. Levies are usually applied at the first
point of sale and are collected by the Commonwealth government on a cost
recovery basis and the Commonwealth matches grower levies for R&D on a
one-for-one basis.

Currently, national citrus levies are A\$2.00 per metric ton on all
citrus for R&D and A\$0.75 per MT on oranges for marketing and
promotion. The total of grower levies collected per year averages about
A\$1.9 million, which results in a marketing program of about A\$400,000
and R&D projects of about A\$2.5 million (including matched funds.)

## Australian Citrus Protocol With China 

In late October 2005, the Deputy Prime Minister and Minister for Trade,
Mark Vaile, and the Minister for Agriculture, Fisheries and Forestry,
Peter McGauran, announced that Australian citrus growers will soon be
able to export to China under a new protocol. Mr. Vaile heralded the
protocol as a major breakthrough which covers all major commercial
varieties of citrus fruit, including oranges, mandarins, lemons and
grapefruit, and from all of Australia\'s citrus producing areas.
Minister Vaile noted the protocol "establishes a foothold in this
important market, significantly boosting our long-term export
opportunities.\"

Mr. McGauran said that the protocol allows for in-transit, cold
treatment of citrus under a regime that, while challenging, is one that
Australian exporters are already meeting successfully in other markets.
He remarked, \"It\'s also flexible, in that conditions can be further
refined in consultation with Chinese quarantine officials as new
technical information becomes available.\"

Australian and Chinese quarantine authorities will move quickly to
implement the protocol\'s operational arrangements - enabling the trade
to begin before the end of the current season, with the full benefits to
be realized by next season. Mr. McGauran said the breakthrough
represents a real shot in the arm for the Australian citrus industry,
particularly given the difficulties it has faced in recent years.

# SECTION TWO: STATISTICAL TABLES

+-------------------+-----+------+-----+------+-----+------+--------+
| **PSD Table**     |     |      |     |      |     |      |        |
|                   |     |      |     |      |     |      |        |
| Oranges, Fresh    |     |      |     |      |     |      |        |
+-------------------+-----+------+-----+------+-----+------+--------+
|                   | **  | **R  | **  | **Es | **  | **Fo | *UOM*  |
|                   | 200 | evis | 200 | tima | 200 | reca |        |
|                   | 3** | ed** | 4** | te** | 5** | st** |        |
+-------------------+-----+------+-----+------+-----+------+--------+
|                   | **U | **   | **U | **   | **U | **   |        |
|                   | SDA | Post | SDA | Post | SDA | Post |        |
|                   | Of  | Es   | Of  | Es   | Of  | Es   |        |
|                   | fic | tima | fic | tima | fic | tima |        |
|                   | ial | te** | ial | te** | ial | te** |        |
|                   | \[O |      | \[O |      | \[O |      |        |
|                   | ld\ | **\  | ld\ | **\  | ld\ | **\  |        |
|                   | ]** | [New | ]** | [New | ]** | [New |        |
|                   |     | \]** |     | \]** |     | \]** |        |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Market Year     |     | **0  |     | **0  |     | **0  | *MM    |
| Begin**           |     | 4/20 |     | 4/20 |     | 4/20 | /YYYY* |
|                   |     | 04** |     | 05** |     | 06** |        |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Area Planted**  | 32  | 3    | 32  | 3    | 0   | 3    | *(HECT |
|                   | 000 | 2000 | 000 | 2000 |     | 2000 | ARES)* |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Area            | 27  | 2    | 27  | 2    | 0   | 2    | *(HECT |
| Harvested**       | 000 | 7000 | 000 | 7000 |     | 7000 | ARES)* |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Bearing Trees** | 6   | 6026 | 6   | 6045 | 0   | 6060 | *(1000 |
|                   | 026 |      | 045 |      |     |      | T      |
|                   |     |      |     |      |     |      | REES)* |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Non-Bearing     | 1   | 1124 | 1   | 1130 | 0   | 1150 | *(1000 |
| Trees**           | 124 |      | 130 |      |     |      | T      |
|                   |     |      |     |      |     |      | REES)* |
+-------------------+-----+------+-----+------+-----+------+--------+
| **TOTAL No. Of    | 7   | 7150 | 7   | 7175 | 0   | 7210 | *(1000 |
| Trees**           | 150 |      | 175 |      |     |      | T      |
|                   |     |      |     |      |     |      | REES)* |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Production**    | 461 | 453  | 500 | 571  | 0   | 550  | *(1000 |
|                   |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Imports**       | 13  | 13   | 10  | 15   | 0   | 17   | *(1000 |
|                   |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+
| **TOTAL SUPPLY**  | 474 | 466  | 510 | 586  | 0   | 567  | *(1000 |
|                   |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Exports**       | 98  | 92   | 110 | 125  | 0   | 115  | *(1000 |
|                   |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Fresh Dom.      | 176 | 174  | 190 | 226  | 0   | 220  | *(1000 |
| Consumption**     |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+
| **Processing**    | 200 | 200  | 210 | 235  | 0   | 232  | *(1000 |
|                   |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+
| **TOTAL           | 474 | 466  | 510 | 586  | 0   | 567  | *(1000 |
| DISTRIBUTION**    |     |      |     |      |     |      | MT)*   |
+-------------------+-----+------+-----+------+-----+------+--------+

+------------------+-----+------+-----+------+-----+------+------+
| **PSD Table**    |     |      |     |      |     |      |      |
|                  |     |      |     |      |     |      |      |
| Orange Juice     |     |      |     |      |     |      |      |
+------------------+-----+------+-----+------+-----+------+------+
|                  | **  | **R  | **  | **Es | **  | **Fo | *    |
|                  | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                  | 3** | ed** | 4** | te** | 5** | st** |      |
+------------------+-----+------+-----+------+-----+------+------+
|                  | **U | **   | **U | **   | **U | **   |      |
|                  | SDA | Post | SDA | Post | SDA | Post |      |
|                  | Of  | Es   | Of  | Es   | Of  | Es   |      |
|                  | fic | tima | fic | tima | fic | tima |      |
|                  | ial | te** | ial | te** | ial | te** |      |
|                  | \[O |      | \[O |      | \[O |      |      |
|                  | ld\ | **\  | ld\ | **\  | ld\ | **\  |      |
|                  | ]** | [New | ]** | [New | ]** | [New |      |
|                  |     | \]** |     | \]** |     | \]** |      |
+------------------+-----+------+-----+------+-----+------+------+
| **Market Year    |     | **0  |     | **0  |     | **0  | *    |
| Begin**          |     | 7/20 |     | 7/20 |     | 7/20 | MM/Y |
|                  |     | 04** |     | 05** |     | 06** | YYY* |
+------------------+-----+------+-----+------+-----+------+------+
| **Deliv. To      | 200 | 20   | 210 | 22   | 0   | 22   | *(   |
| Processors**     | 000 | 0000 | 000 | 6000 |     | 0000 | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **Beginning      | 1   | 1585 | 1   | 438  | 1   | 6614 | *(   |
| Stocks**         | 585 |      | 331 |      | 384 |      | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **Production**   | 15  | 1    | 16  | 1    | 0   | 1    | *(   |
|                  | 384 | 5385 | 153 | 7385 |     | 6923 | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **Imports**      | 31  | 2    | 31  | 4    | 0   | 3    | *(   |
|                  | 362 | 5378 | 000 | 0000 |     | 4000 | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY** | 48  | 4    | 48  | 5    | 1   | 5    | *(   |
|                  | 331 | 2348 | 484 | 7823 | 384 | 7537 | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **Exports**      | 2   | 1910 | 2   | 2209 | 0   | 2500 | *(   |
|                  | 000 |      | 100 |      |     |      | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **Domestic       | 45  | 4    | 45  | 4    | 0   | 4    | *(   |
| Consumption**    | 000 | 0000 | 000 | 9000 |     | 9000 | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **Ending         | 1   | 438  | 1   | 6614 | 0   | 6037 | *(   |
| Stocks**         | 331 |      | 384 |      |     |      | MT)* |
+------------------+-----+------+-----+------+-----+------+------+
| **TOTAL          | 48  | 4    | 48  | 5    | 0   | 5    | *(   |
| DISTRIBUTION**   | 331 | 2348 | 484 | 7823 |     | 7537 | MT)* |
+------------------+-----+------+-----+------+-----+------+------+