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"The price of airfreight has tripled since COVID-19 hit Australia in late March"

Business diversity the key to lessening the impact of coronavirus on the export front

Diversity has helped a major Australian fresh produce company avoid any serious problems throughout a very challenging autumn and winter seasons, with the widespread impact of COVID-19 across the global industry.

Australia Fruits has suffered setbacks with the airfreight side of the business, with the high cost and limited capacity. But General Manager Vince Brullo says the company is fortunate to be diverse with sea freight, container loading and imports sales.

"Main challenges at the moment is airfreight, we service supermarkets and foodservice industries with our mixed airfreight shipments," he said. "The price of airfreight has tripled since COVID-19 hit Australia in late March. We haven’t had to ask staff to take any pay cuts or use the government's Job Keeper programs. We are very lucky we’re in the food industry which is an essential service. I would like to thank our dedicated staff at Australia Fruits holding strong and staying safe; coming to work daily, wearing masks, hand sanitizing and even getting daily temperature checks upon the entry of premises."

Export wise, Australia Fruits is currently supplying citrus lines, including navel and Cara Cara oranges, lemons and mandarins, as well as pears and apples. In addition, there are mixed containers including vegetables such as Carrots, Onions and Potatoes.

"Through the winter period it's mainly sea freight and now especially with COVID-19 and limited airfreight capacity," Mr Brullo said. "We are still doing airfreight for our supermarket customers but the freight can be expensive. We also do container loading for third-party customers. Our registered logistics facility, purposely built to accommodate fresh produce container loading. We are extremely thankful for their ongoing support.”

On the import side, Australia Fruits handle garlic and shallots all year round from various countries, as well as sourcing grapes and stonefruit from the USA. But Mr Brullo says they are extremely expensive at the moment, and with COVID-19, sales are challenging.

Citrus sales are slightly down, especially with the China market.

"Other markets are doing OK; like Vietnam, Indonesia and many pacific island countries looking for supply," Mr Brullo said. "Prices are firm, possibly due to supply being down compared to last season. More So Class1 v Composite Grade Fruit. Quality is good so that is a bonus allowing recurring demand. The main market I think affected by COVID is China."

He added that apples and pears seem to be a decreasing demand from Australia, as it is hard to compete with NZ, South Africa and Chile - with the cost of production much higher than competitors in those countries, so Australia has to target premium markets. While vegetable sales have continued steadily.

"Most of these veggies are sent by air," he said. "Items like salad mixes, Brussels sprouts, broccoli, celery and even organic produce. We service predominately supermarkets and they have kept going even with the limited airfreight options and higher prices. It’s definitely a different year and it’s something we have never seen before. I guess you just have to accept it and get on with it."

Australia Fruits also found the grapes season challenging, as the China market simply did not recover as they were going through the restrictions with the lockdown.

"People were out of work due to factories closing hence not having the excess money to pay for premium Australian grapes that we experienced in the past 5 years," Mr Brullo said. "Unfortunately, the industry had to adjust, but from our experience, the prices returned were above the cost of production and now we await the landscape for next year. I have heard of horror stories of extremely low prices returned, fortunately, our long-term customers were fair-minded and returned an accepted price for our grapes. I think overall we got out of it ok. We would like to thank our suppliers and customers for working with us through these unforeseen times."

While the main challenge of freight has struck during the winter, Mr Brullo is very concerned about the upcoming spring/summer season, with the amount of fruit exports increasing.

"Together with Wandin Valley Farms we are substantial exporters of cherries and stonefruit and if things don’t improve, we will have issues with freighting the volume," Mr Brullo said. "We are investigating the possibility of Charter flights and are in discussion with industry and other grower/exporters to collaborate together if required. November through to January will be a testing time. Korea is a new market for mainland cherries this season – they are keen for our fruit and we are certainly keen to expand our options. Let’s see how it goes, fingers crossed."

For more information
Vince Brullo
Australia Fruits
Phone: + 61 3 9338 8245

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