Victorian exporters have been trucking grapes to Sydney and Perth to get the fruit airfreighted into Asia.
Some powder exporters are paying a 35% premium to secure airfreight space because of the insatiable demand from Chinese consumers for Australia’s infant formula.
This demand has seen supermarkets and pharmacy shelves cleared of formula stock and limits imposed on the number of tins each shopper can buy, with opportunistic sellers reportedly making huge margins selling infant formula online.
Tins of Australian infant formula sell for about $20 in Australian supermarkets but are reportedly being sold for more than double that price in China.
Australian Horticulture Exporters Association chairman David Minnis said he was “struggling to get airfreight space out of Australia because of milk powder and vitamins going into China”.
Australian Tablegrapes Association chief executive Jeff Scott said exporters predicted about 40% of grapes might not be shipped to Asia by air this season if the freight supply shortage continues.
The number of routes and frequency airlines can fly to and from Australia is regulated, but it is up to airlines how much space they allocate to freight versus passengers.
The problem has been compounded by a falling Australian dollar, which has led to fewer imports into Australia, making it uneconomic for airlines to carry freight.
Two dedicated airfreight services a week have been lost out of Melbourne recently, which equates to about 200 tonnes of cargo a week.
Minnis said the surge of airfreighted milk formula was because of Chinese consumers not trusting companies shipping formula.
“With airfreight, the exporter can show a purchase note to prove it was shipped from Australia,” he said.
Cathay Pacific Australia cargo manager Nigel Chynoweth said October to March was a busy period, with horticulture, seafood and beef at peak supply, but there had been a “large increase in milk powder” demand.
Exporters and growers desperately want to supply Asian markets for the lucrative Chinese New Year festival on February 8.
According to Australian Bureau of Agricultural and Resource Economics and Sciences, table grapes were the most valuable fruit export in 2013-14, at $227 million.
Minnis is concerned farmers will not be able to capitalise on the hard-fought trade wins negotiated under free-trade agreements.
“I’m concerned about the whole industry. If we lose access to airfreight we will lose access to many markets in Asia,” he said.
“We won’t capture the benefits of the FTAs if we don’t have access by air and sea.”
