RABOBANK expects coronavirus to bring softer export prices for key Australian fresh produce exports in the first half of 2020.
The finance company recently presented the projection in its Agribusiness Monthly March 2020 report.
Rabobank horticulture and wine senior analyst, Hayden Higgins, said coronavirus brings complications for exporters of crops with a high reliance on China, such as citrus, table grapes, and almonds.
According ot Rabobnank, for the year-end December 2019, China accounted for about 35 per cent, 38pc, and 55pc of export receipts, respectively, for these crops.
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But it will be supply chain disruptions, not a lack of demand, which will be the contributing factor.
"Despite indications of port access freeing up, Rabobank expects softening of in-market prices for fresh produce exports in China for the balance of Q1," Mr Higgins said.
"This is not from a lack of demand, rather supply chain disruptions continue to impact ability to deliver produce to consumers.
"The depth of this price impact after Q1 remains uncertain and is highly dependent upon the timeframe it takes for China to contain the virus."
Mr Higgins said the spread of coronavirus and its impacts to other key markets in Asia will likewise influence demand across the balance of Q1 and into Q2 2020.
"Rabobank expects that supply diverted to markets outside of China, where that supply is not unseasonal, will result in reduced local market prices bringing downside to total export receipts for the second half of the export year to June 2020," he said.
"Further complicating the picture, as noted in our 2020 outlook, many Southeast Asian countries rely on trade with China.
"Further economic downside in China has the potential to flow into these economies, potentially bringing reduced demand across a wider geographic region.
"A falling Australian dollar is expected to provide some buffer to offset any price reductions."
Rural Bank's Insights Update Report - March 2020 suggested a delayed table grape harvest could prove advantageous if it meant the impact of coronavirus on China's logistics were able to resolve themselves or at least ease before export volumes pick up in earnest.
"There may be positives to a later season, especially this year, as coronavirus has restricted China's logistics industry and caused consumers to become more cautious when purchasing food.
"China is Australia's largest export market for table grapes accounting for 38.7pc of export volume in 2019."
"However, inter-province logistics are expected to return to full capacity in the coming weeks restoring usual table grape supply chains," Rural Bank said.
The Rabobank report also advised keeping an eye on revised US almond crop numbers which may bring lower almond prices.
"Recent US almond crop forecasts put the 2019/20 crop at around 2.5bn pounds," Mr Higgins said.
"This is above the earlier crop revisions in 2019, which had the crop at around 2.2bn pounds. We expect this to flow into price softening for US almonds as the market readjusts."