Australian Orange Industry on the Brink of Collapse Due to Unsustainable Contracts

Australian citrus growers have expressed concerns about the viability of the orange industry, particularly due to short-term contracts for Valencia oranges, which are primarily used for juice. These contracts are becoming increasingly untenable due to rising production costs. In the Murrumbidgee Irrigation Area, the nation’s largest juice production region, grower Vito Mancini mentioned that initial offers were far below production costs. While prices have recently improved, many contracts provide little long-term security for growers.

Rising costs have been influenced by disruptions in the supply chain caused by events like the Ukraine war and the COVID pandemic. Nathan Hancock, Citrus Australia’s chief executive, noted significant impacts on farming inputs like diesel and fertiliser and increased labour costs. The Original Juice Company, a major Australian processor, purchases around 25,000 tonnes of Valencia oranges annually from the Murrumbidgee area. Ralf Huempel, its Marketing Director, mentioned that while consumer demand remains steady, prices for growers might increase due to rising costs of imported concentrate.

Huempel emphasized the need to derive more value from oranges since only about half of the fruit becomes juice. They’re exploring options like orange oil and peel extract. Hancock highlighted the shrinking production of juicing oranges in Australia and emphasized the need for stable, long-term contracts. He urged for better cooperation between processors and growers to ensure profitability and sustainability for the industry.