Australia's cherry sector is booming, but three consecutive La Nina weather events are affecting production, according to Rabobank. The bank says this will not only affect growers' profits, but also affect availability, quality and prices. Despite a growth in plantings over the past four years, La Nina has caused a 15% reduction in Australia's cherry production in 2021/22.
The main producing states, New South Wales and Victoria, have been particularly affected. The third consecutive La Nina could cause further problems in the next harvest.
The bank points out that climate challenges have already had significant impacts on exports, with cherry exports to China down 68%. This, along with logistical and transportation challenges during the cherry season, has affected key markets. With the prospect of a wet harvest this year, there may be a reduction in local supply for Australian consumers, with possible price increases.
Exports are crucial to the Australian cherry sector, accounting for 25% of sales volumes but nearly 40% of sales value. However, declining volumes of high-quality cherries suitable for export will strain margins in the coming period. In addition, air freight costs remain high.
The report indicates that despite current challenges, Australian cherries are considered among the most valuable and expensive in the export market. China is a key market, and the zero-Covid policy in China will be monitored to assess the impact on demand for Australian cherries.
Read the full article: Rabobank
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