Trade Update: July-December 2010

Trade : 27-04-2011

Summary

The improvement in the vegetable industry’s trade performance evident in July-December 2009 was not sustained in the second half of 2010.
Australia’s deficit in trade in vegetables widened to $169 million during July-December 2010 from $156 million in the corresponding period of the previous year.

The larger deficit reflected a 5.1% rise in the value of imports to $296 million following a decline of 12.4% in the corresponding period of 2009. Exports rose by 1.7% in the second half of 2010 to $127.1 million from $125 million in the same period of 2009.

The latest trade figures are disappointing following the sharp reduction in Australia’s deficit in trade in vegetables in the second half of 2009. Imports continue to make inroads into the domestic market, assisted by the strength of the Australian dollar, while export performance has generally been lacklustre over recent years

Exports

The modest improvement in Australian vegetable exports during July-December 2010 was driven by increases in the value of fresh vegetable exports to their highest level since the second half of 2004. Fresh vegetable exports rose by 9.8% in the latest period, raising their share of total vegetable exports in the second half of 2010 to 62.3%.
Exports of ‘other vegetables’ continued their rise from the low of 2007 with the latest increase reflecting increases in exports of dried vegetables and vegetable seeds offset by a sharp decline in exports of potato seeds.

The value of frozen and processed vegetable exports fell. Processed vegetable exports share of the total declined to 15.3% and frozen vegetable exports share fell much more sharply to 11.4%.

New Zealand retained its position as Australia’s leading market for vegetable exports despite a 13.4% decline in the value of exports in the reporting period. Japan, Singapore, and the United Arab Emirates held their positions as the next most important markets. The biggest increases among the leading destinations were to Saudi Arabia, Papua New Guinea, Thailand, Hong Kong, and the UAE.

Export performance remains disappointing in a longer-term context with exports in July-December 2010 less than 70% of their value in the corresponding period of 2001.

Imports

The increase in imports of vegetables in July-December 2010 mainly reflected a strong rise in imports of fresh vegetables, which rose by almost 41% to a record $40 million, driven by strong rises in the import value of garlic and onions, with gains of 49% and 40% respectively.
The value of the processed (up 5.2%) and ‘other’ vegetable categories also rose, while the value of frozen vegetable imports (although not volumes) continued to decline, albeit with a much smaller fall in the second half of 2010 than was evident in the same period of 2009.

Imports of processed non frozen vegetables remain the dominant category accounting for 37% of total vegetable imports. Imports of frozen vegetables accounted for 31% of the total in 2010, down from a peak share of 38.5% in 2008.

New Zealand, China, Italy, and the US remained the top four source countries for imports during July-December 2010, supplying 64% of total imports.

Imports from New Zealand rose by 14.3% in July-December 2010, recovering most of the decline experienced in the corresponding period of 2009 and boosting its share of total imports to 20.5%. Imports from China rose by 6% lifting its share of total imports to a record 17.8%.

The strongest rise among the main source countries was in imports from the US, which rose by 38% to $32.7 million, still below the record $43 million recorded in the second half of 2008.

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