Insights August 2023

Commodity overview

• Favourable weather and improved labour availability have aided vegetable supply out of Queensland.
• Macadamia production estimates have been revised down 11 per cent to 53,160 tonnes in shell.

Horticultural producers have seen relatively favourable weather and improved labour availability in July. Minimal frost events and decent rainfall across key areas are ensuring strong growing conditions. Meanwhile seasonal labour supply is continuing to improve. Labour availability has been boosted the Pacific Australia Labour Mobility (PALM) Scheme. The scheme now sits at well over 35,000 workers. However, the lack of UK backpackers resulting from the recent trade agreement is a concern.

Fruit

Below average US and South African orange output is currently forecast due to ongoing weather issues. This will prove beneficial for Australian producers, while a drop off in output from Chile will also prove favourable. Reduced global orange supply should provide a boost to global demand for Australian produce. Current Australian orange exports remain just over eight per cent below last year. This should reverse amidst the lack of global supply and later harvest seen this season. Navel oranges wholesale prices have continued to soften in July as additional supply comes onto the domestic market. Hass avocado prices remain near record lows. This is driven by substantial domestic production across Queensland which continues to hit the market. Current wholesale prices currently sit at around $1.50/kg, well below the three-year average of $2.67/kg. The industry body is continuing to develop new export pathways to absorb the growing domestic supply. Avocadoes Australia have announced the 10 trial avocado shipments to India were successfully received. This opens the door for increased avocado exports to the nation over the back half of the year. Cold and wet weather across north Queensland has slowed banana output across the region. This has seen reduced retail availability with supermarket supplies currently limited. Supply is expected to remain constrained until warmer weather returns. Prices are elevated as a result, sitting 70 per cent higher than last year.

Vegetables

Vegetable prices have trended higher over the last couple of months. Cooler winter weather has slowed the supply of some key vegetable varieties. Tomatoes and cucumbers in particular saw reduced supply in June while frozen vegetables also jumped in price in early winter. Tomato prices have now begun to ease as improved volumes out of Queensland begin to hit the market with warmer weather on the horizon.

Nuts

Macadamia industry production estimates have been revised down 11 per cent to 53,160 tonnes in shell, which is comparable to last season. Earlier estimates had pegged the crop at around 60,000 mt in shell. This downwards revision will see limited support come into domestic pricing. Record global supply will keep prices near record lows for the export orientated crop. South Africa is expected to see a 12.8 per cent increase in production to almost 78,000 mt. China is also expected to produce over 56,000 mt which will impact demand for Australian nuts from the key Chinese market.  

* The citrus price index includes oranges, mandarins, lemons and limes
** The average avocado price includes Shepard and Hass avocados
Sources: Ausmarket Consultants, Rural Bank