Citrus grower Dongfang says could distribute Australia fruit in China

Asian Citrus Holdings

19/10/2015 07:52

* Chairman says Dongfang could distribute Australia fruit in 
China 
    * Australia has been pushing to become 'Asia's fruit bowl' 
    * Dongfang has listed on Australia bourse 
    * Shares up after first day of trade 
 
    By James Regan 
    SYDNEY, Oct 19 (Reuters) - Dongfang Modern Agriculture 
Holding Group  DFM.AX , China's No.2 producer of citrus fruit, 
said it was considering distributing fruit grown by Australian 
farmers in its home market. 
    That could be good news for Australia's faltering push to 
brand itself as 'Asia's fruit bowl', with exports of fruit from 
the country to China still only standing at around $30 million a 
year. 
    "We hope to become a beachhead for Australian primary 
industries to export to China through our distribution network," 
Dongfang Chairman Hongwei Cai told Reuters on Monday through an 
interpreter. 
    The comment came after Dongfang raised A$39.2 million ($28.5 
million) through the largest-ever listing on the Australia 
Securities Exchange of a company operating solely in China. 
Shares closed their first day of trading on Monday up A$0.25 at 
A$1.25. 
    "The first point is to give Australian investors exposure to 
China's primary industries and the second is to allow Australian 
primary industries to use Dongfang's distribution network into 
China," Cai said. 
    Operating in the world's largest agricultural market, 
Dongfang's business is primarily growing fruit, particularly 
oranges, tangerines and pomelos. It had a 1.2-percent market 
share in 2014 and competes with companies including the largest 
producer in the country, Asian Citrus  0073.HK . 
    Under former prime ministers Julia Gillard and Tony Abbott, 
efforts were made to transform Australia's remote Northern 
Territory district, its closest point to Asia, into a major 
source of fruit and other foods for the region. 
    But a government task force found that only 60,000 hectares 
of land were suitable for irrigated agriculture - tiny in 
comparison to the size even of many individual farms in Asia. 
    Cai also said that a pending free trade agreement between 
China and Australia, due to be signed this year, would see all 
tariffs on Australian citrus exported to China eliminated over 
eight years. Orange tariffs are currently 11 percent, while tax 
on mandarins stands at 12 percent.  
    Asian markets for fruit have been hit as Indonesia wants to 
limit import quotas as part of a policy to encourage local food 
production. 
 
 
($1 = 1.3753 Australian dollars) 
 
 (Reporting by James Regan; Editing by Joseph Radford) 
 ((jim.regan@thomsonreuters.com; +612 9373-1814; Reuters 
Messaging: jim.regan.reuters.com@reuters.net)) 
 
Keywords: DONGFANG AUSTRALIA/FRUIT