Operating a business in a world without international travel
Vegetable exports were on the agenda at Hort Connections in 2021. A panel – including AUSVEG CEO Michael Coote – took to the stage at the Annual Vegetable Industry Seminar to discuss the challenges exporters face and identifying international trade opportunities, even during the current global pandemic.
The global pandemic has not only ground international travel to a near standstill, it has also had huge implications for international trade – particularly in Australia. For horticulture, this presents big challenges.
How do Australian producers move forward with exporting? Hort Innovation Head of International Trade, Brei Montgomery, and a panel of experts including Export Council of Australia Chair Dianne Tipping, AUSVEG CEO (formerly National Manager – Export Development) Michael Coote, Ryan Densley from Moffatt Fresh Produce, Trent De Paoli from De Paoli Orchards and Dicky Bill Australia Director Ryan McLeod led a discussion at Hort Connections 2021 about the past year, and where the horticulture export industry can find opportunities in the next 12 months.
“Relationships have never been more important and more challenging to maintain and develop in the increasingly virtual world,” Brei told the audience.
“It will require creative outside the box thinking as to how the Australian export sector continues to hold market share in international markets and create new market opportunities with current and emerging partners. If we don’t show up, our competitors will – and they are.”
Despite the challenges of 2020, which included not only the pandemic but also bushfires and drought, Michael said the statistics were encouraging.
“In terms of vegetable exports last year, they were down about 6.6 per cent across the categories. We still managed to get about 216,000 tonnes of vegetables exported, worth around $263 million to over 50 countries. With all those disruptions of last year, these are really positive outcomes,” he said.
Given the perishable nature of vegetables, exporters are heavily reliant on air freight, so the lack of flights and huge increase in freight fees has been one of the biggest challenges. The Australian Government’s International Freight Assistance Mechanism (IFAM) package has helped to keep global air links open, but the panelists all agreed that while a return to consistent scheduling will be a significant help, air freight costs will probably never go back to their pre-pandemic levels.
“Prices are fluctuating and – depending on the market – can be two, three, or four times pre-COVID rates, and I certainly expect that in the short- to medium-term. And then the expectation is, long-term, that air freight rates will settle somewhere around 1.8 to 2.5 times pre-COVID rates, even when you do get back to some sort of normal and consistent schedule,” Michael said.
Looking to the future
The only real growth opportunity for the vegetable industry in Australia is from international markets, and Michael said while there are a lot of challenges, there is also a lot of support from industry groups.
“The last thing I want to see is people giving up on it because it’s too hard, too difficult or too costly. There’s a huge growth opportunity there. But we need to see growth in this industry and that in the future that will come from export markets,” he added.
Finding the opportunities
With so many unknowns, all panelists agreed their biggest focus currently is maintaining their existing customers, rather than expansion, and increasing communications channels with customers. Overall, Trent said he believes the pandemic has created more opportunities than ever.
“I think diversity creates opportunity, and I think the knocks on the door and the conversations that are happening now potentially didn’t exist 12 months to two years ago,” he said.
“I think that provides a greater opportunity more than anything; from a global perspective, it’s short-term loss for long-term gain.”
Find out more
Presentations at the 2021 Annual Vegetable Industry Seminar are available to watch on the Hort Connections website.
Watch the ‘Vegetable Exports – international trade outlook’ presentation at Hort Connections 2021 below, featuring:
Brei Montgomery, Hort Innovation – Speaker
Dianne Tipping, Export Council of Australia – Moderator
Michael Coote, AUSVEG – Panellist
Trent De Paoli, De Paoli Orchards – Panellist
Ryan McLeod, Dicky Bill Australia – Panellist
Ryan Densley, Moffatt Fresh Produce – Panellist
Annual Vegetable Industry Seminar is a strategic levy investment under the Hort Innovation Vegetable Fund.
This project has been funded by Hort Innovation using the vegetable research and development levy and contributions from the Australian Government.
Project Number: VG20000
Cover image: Hort Innovation Head of International Trade, Brei Montgomery. Photography by Andrew Beveridge.