Supercharged activity in several horticulture categories in recent years has prompted Rural Bank to tag the sector as one to watch closely in 2018.
In particular, a couple of notable movers smashing records in domestic and export markets are avocados and oranges.
In the vegetable industry, crops with increasing export market traction and likely price growth in the year ahead include asparagus, celery, broccoli and cauliflower, according to Rural Bank’s Ag Answers research team.
Last year average wholesale avocado prices jumped 78 per cent in the Brisbane market as the fruit’s popularity grows rapidly across almost every age demographic.
The Ag Answers outlook report for 2018 said although total avocado planting areas in Australia increased more than 1000 hectares to 3850ha in the five years to 2016, successful marketing efforts and Australia’s thriving cafe culture had fired up demand which now regularly exceeded supply.
“We’ve kept a watch on horticulture for a while, particularly as it has enjoyed quite strong export activity in the past five years and domestic consumption is also strong
By 2021 10pc of the crop was likely to be exported.
Export demand for navel oranges was also surging, with China increasing its imports from Australia by 60pc last year to overtake Japan as our biggest market.
“China recognised South Australia as free of fruitfly in November, which could see exports from SA increasing in 2018,” the report said.
“Plantings are expanding but it takes nurseries some time to grow new tree stock, which could be beneficial for fruit prices if current demand continues to grow."
“We’ve kept a watch on horticulture for a while, particularly as it has enjoyed quite strong export activity in the past five years and domestic consumption is also strong,” said Rural Bank’s agribusiness general manager, Andrew Smith.
“Free trade agreements have given us new access to markets in Asia, creating more consistent demand which in turn has fostered fresh investment and innovation in the sector.”
Rural Bank, which services about 10pc of Australia’s farm lending market, has a particularly solid customer base among large family farming enterprises in the horticulture, dairy and broadacre segments.
Mr Smith said weighted average capital city prices for vegetables had risen almost continually for 29 years.
The bank tipped vegetable prices would have a slow start to 2018 with 1.6pc price increases on 2017 values, but would average increases of about 5.6pc for the rest of the year.
On the export market, broccoli and cauliflower volumes had averaged 31pc growth in the past five years, with Singapore hungrily consuming about 70pc of the expanding export crop.
Locally, broccoli prices at Melbourne's wholesale markets ended 2017 about 20pc up on the year before, although cauliflower prices were down slightly.
Many vegetable crops were oversupplied at the end of last year after warmer than usual early spring conditions in Queensland and along the east coast triggered production increases.
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