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Avocado smashes decline in produce market

WA is wholesaling up to $77 million more avocados a year than two years ago, according to an industry report unveiled at yesterday’s WA Horticulture Updates.

Perth Markets Limited chief executive Stephen Ward said independent research commissioned by PML and conducted by Freshlogic, found an additional 12,000-14,000 tonnes of avocados a year, worth $5.50/kg, were being sold in WA compared with two years earlier.

The higher avocado production and good prices contributed to WA achieving relatively stable volumes, and values of about $1.1 billion (excluding exports), for wholesale produce over the past two years, by balancing out several negative factors.

These included pest and disease challenges such as the tomato potato psyllid, which led to constraints for interstate exports.

“This left more product in the WA market, and combined with improving Carnarvon output, supply increased, which put downward pressure on wholesale prices,” Mr Ward said.

Other challenges were competitive intensity in the retail market, a key driver being the expansion of the discount Aldi network. Additionally, WA population growth, which was a major driver of consumption, continued to be lower than national levels, Mr Ward said.

He said there had been little operational change since the market complex, previously owned and operated by the State Government’s Perth Market Authority, was bought by PML for $135.5 million in March 2016.

“Internally we’ve obviously changed, our ability to fund new developments has changed, but day-to-day not much has changed,” he said.

Mr Ward said there had been rent increases above CPI, capped at 3 per cent or 5 per cent for existing tenants. Other cost increases included statutory charges and insurance, partly offset by reduced electricity costs.

Separately, a leading agribusiness consultant David McKinna called on the State’s horticulture businesses to band together to increase exports and increase their share of the global market.

He said most small businesses may find it difficult to take advantage of the export opportunity in their own right and would benefit greatly from collaborative export models.

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