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U.S. to see quality over quantity with Australian citrus shipments

by Chip Carter | July 14, 2011

This year’s Australian citrus program will be shorter than expected, but the first boatloads of Navels from Down Under arrived on American shores earlier this month at the port of Long Beach, CA.

By all accounts, quality is outstanding, though supplies are about 70 percent of what importer DNE World Fruit Sales would have liked.

“What we’ve seen so far is very encouraging,” said Stu Monaghan, national sales manager for the Fort Pierce, FL-based firm. “The color is very good, and the taste is exceptional, so the start to the Australian Navels is

DNE World Fruit Sales' Jimmy Martin, packing operations director, and Stacey Register, Australian import operations manager, examining Australian citrus that arrived at the port of Long Beach, CA. The company expects volume of Australian citrus sent to the United States to be down 30 percent this season as more fruit is headed to other markets where exchange rates are more favorable. (Photo courtesy of DNE World Fruit Sales)
very good in terms of quality. We wish we had more of them.”


Exchange rates and f.o.b. rates have led Australian growers to send more fruit than normal to Southeast Asia this season, thus reducing volume bound for the United States to an anticipated 700,000 cartons compared to 1 million cartons last year.

“The exchange rates have not improved,” Mr. Monaghan said July 13. “If the exchange rate was better, we would get a lot more fruit. But at the price expectations we have with the Chilean arrivals peaking mid-August, the returns back to the [Australian] grower are much less compared to their Southeast Asia and domestic markets. The return to the growers in U.S. dollars, when they have to exchange it in Aussie dollars, is not nearly enough when compared to the yen starting at the same f.o.b. point. Our growers will get more Australian dollars for yen than [U.S.] dollars. And the domestic market is also very strong for them.”

Less fruit from Australia will not likely translate into higher prices in the U.S. market, but it should prevent a glut like what was seen last year, which caused summer citrus prices to tumble.

“With 1 million Chilean cartons that will be on the West Coast, we know prices will not be higher as a result of the lower volume [from Australia],” Mr. Monaghan said. “It just means that the market won’t reach a glutted point like it did last year.”

And with 700,000 cartons of Australian citrus due to arrive in weekly shipments through mid-October, Mr. Monaghan said that DNE has a game plan that will make sure it takes care of its customers.

“It’s not as if Australia has abandoned the market,” he said. “It’s just that less of their fruit is coming to the U.S. We want to service our customers as well as we can, and to do that you’ve got to really plan what you have in terms of volume, weigh it against their needs and make sure you don’t let anybody down.”

Following Australian Navels are Daisy mandarins, which are already on their way from Australia. DNE will have 60,000 cartons of Daisies available between now and mid-August.

Mr. Monaghan added, “We do have a strong Minneola program planned — about 120,000 cartons. That starts the first week of August and will run through mid-September.”

Although there will still be plenty of fruit to go around, Mr. Monaghan expects to see fewer ads, “but that remains to be seen.” He noted that “we really don’t know the extent of the freeze in Chile — we understand they have a 20-25 percent loss in the growing region where the majority of their Navels come from.”

But the most likely scenario is “just a shorter [Australian] program this year, which will probably mean that the way will be paved for California to start up whenever they’re ready come late October or early November,” Mr. Monaghan said.