Vegetable Spotlight - Broccoli - Snapshot

Vegetable Spotlight – Broccoli

                                       Snapshot
• Broccoli is Australia’s 10thth most valuable vegetable crop, accounting for 2.9% of total
vegetable production with a gross value of $87.6m in 2006/07
•The level of production and yields recorded in financial year 2006/07 are significantly
lower than in recent years
• The total area planted was in line with previous levels
• Victoria and Queensland dominate Australian production
• Australia runs a positive but shrinking balance of trade in broccoli
• Strong competition from China is eroding Australia’s share of exports amongst Asian
economies
• Partially offsetting this development is the fact that new markets in the Middle East are
being developed

To ensure the accuracy of its figures, the Australian
Bureau of Statistics employed a new methodology in
collecting records for the 2005/06 Agricultural Census.
The aim was to account for a greater proportion of
establishments within the scope of the survey. As a
result, the data generated since the census – such as
production volumes, area planted and yields – are not
directly comparable to historical statistics. Readers
should use this material with caution.

Current Australian Broccoli Production
• Australian broccoli production totalled 40,032 tonnes in
2007, down 8.7%
• The area planted to broccoli was 7,136 hectares, up
11.4%
• The average yield per hectare over the year was 6.5
tonnes, down 18.1%

Long Term Production Trends
• The key measurements of broccoli production all
displayed growth over the last decade, however there
has been a recent fall-off in production
• The 2007 figures remain broadly consistent with the
long term movements

State Broccoli Production

                                                          • Victoria (53%) and Queensland (20%) produce over
                                                          70% of the national broccoli crop
                                                          • Yields are fairly even across most states, with only
                                                          WA significantly outperforming the national average
                                                          • Production levels in Victoria and WA are the most
                                                          volatile, accounting for most of the variation in national
                                                          output in recent years

                                         Broccoli Consumption

                                                          • Data on consumption is fragmented and anecdotal.
  Vegetable   Average for 3   Average for 3
              years ending    years ending
                                                          • AUSVEG Ltd estimates suggest that consumption
                1999(kg)        2006(kg )                 of broccoli per capita has been rising in recent years
                                                          to 2.4 kg.
Broccoli           1.7             2.4                    • Comparisons with estimates of per capita
Potatoes          68.0            61.9
                                                          consumption of some other major vegetables are
                                                          presented in the table to the left.
Carrots           11.1            11.5
                                                          •Broccoli growers have been at the forefront of
Tomatoes          22.0            24.2                    innovation with new varieties. A new variety launched
                                                          in 2008 is expected to boost consumption further.

Characteristics of Australian Broccoli Trade

• Australia runs a strong but contracting balance of trade in broccoli.
• Exports are exclusively fresh with markets developed in local regions such as Singapore
and Malaysia, however trade with the United Arab Emirates has become increasingly
important
• A very small quantity of fresh broccoli was imported from 2007/08, mostly sourced from
New Zealand
• Due to the labour intensive nature of production, low cost countries, in particular China
are now beginning to dominate the export market

Current Trade Data
                Exports
                • Export values have fallen dramatically over the last 5
                years, with the value dropping from $15m in the
                2002/03 financial year to $4.6m in the 2007/08
                financial year. This represents a 19% reduction each
                year on a compounded basis.
                • This fall reflects the increasing dominance of Chinese
                agricultural imports which lead to both Singapore and
                Malaysia cutting back on Australian exports from
                $5.7m and $2.7m respectively in 2002/03 to $2.2m
                and $0.8m respectively in 2007/08.
                • In contrast new markets have been opened up in the
                Middle East, with the United Arab Emirates increasing
                exports by 111% over the period, which equates to a
                compounded growth rate of 16% p.a.
                •Exports of fresh broccoli over the last financial year
                totaled $4.6m with Singapore, the UAE and Malaysia
                the primary export markets.

                Imports
                • Imports of fresh cauliflower and broccoli are minimal
                (import data is not segregated) and totaled less than
                $20,000 in the 07/08.

Market Segments

•   The broccoli market consists of the fresh market segment and the processed segment (which is
    predominantly composed of freezing)
•   There are a wide range of broccoli varieties such as calabrese, sprouting and romanesco.
•   Despite the different varieties of broccoli available, most stores only stock the calabrese
    variety.

                                         Market Access

•   Domestic markets are free and there are no restrictions on broccoli production.
•   Imports of fresh broccoli are free to enter Australia whilst a 5% tariff applies on frozen
    broccoli (4% for developing nations)
•   Access to foreign markets is reasonable with freight costs being the major barrier to
    expanded exports.
•   Exports to Singapore and Malaysia do not incur a tariff.
•   The only significant tariffs in place in the region are in Taiwan, the Philippines and Korea
    with tariffs of 27%, 25% and 20% respectively.

For more economic analysis of vegetable production, visit the
                 AUSVEG webpage at:
                  www.ausveg.com.au

                                    Professional advice is recommended for all strategic and
                                       financial decisions. This document does not represent
                                                                             professional advice.
                               AUSVEG and the author do not accept liability for any damage
                                   or loss suffered due to use of information contained in this
                                                                                      document.
                                                                                     © AUSVEG

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