Avocado supply is 500,000 trays up on last year, causing oversupply concerns across WA. However, the Federal Government’s recent Hass market access deal with Thailand — which will see the first avocados exported later this year — is expected to offset the potential oversupply consequences. Rural Bank’s mid-year agricultural outlook report revealed the State’s avocado industry continues to flourish, with another strong year of Hass avocado production forecast as younger plantations continue to mature. The forecast nine million trays — each weighing 5.5kg — set to be produced in WA is well up on the 8.5 million trays produced in 2021-22. About two thirds of WA’s plantations are at full production age, sparking concerns about over-supply and price drops among some farmers who fear large-scale corporates are planting too many trees. Rural Bank head of agribusiness development Andrew Smith said recently announced export access to Thailand would be “crucial” to absorbing this supply in coming seasons, with a gazette notice for import conditions inked on May 11. The move means farmers who applied to export avocados in April are now able to access a market the industry predicts could be worth $10 million to WA farmers by 2026. Other fruit and vegetable production was forecast to remain above average this year, but conditions could affect crops coming into summer with deep soil moisture levels well below those in the east. Mr Smith said three “key themes” affecting agriculture in the second half of the year were dry seasonal conditions, trade conditions and persistent economic headwinds “now swirling across the globe”. “A higher Australian dollar is also expected to weigh on the competitiveness of Australian agricultural exports but overall we expect marginal impact, with our dollar still sitting below historic averages,” he said. “Below median rainfall is very likely across most of Australia over the next six months and it’s this drier seasonal outlook that’s now weighing on production forecasts across a range of agricultural commodities.” The Russian invasion of Ukraine continues to drive volatility across both grain and oilseed markets, but the diversification of Australia’s export markets would “hold Australian exporters in good stead”. Labour shortages are expected to continue to ease on the back of net migration and working visa approvals, along with a general easing of fertiliser prices and pandemic-induced supply chain issues. “These reduced input costs support grower margins amid the broader decline in commodity prices seen across the first half of this year,” Mr Smith said. “A positive for Australian farmers is that both global bulk and container shipping rates have now returned to pre-pandemic levels as the slowdown in global economic activity softens freight demand. “We continue to see trade relations between China and Australia improving.” To see the full report, visit ruralbank.com.au/outlook.