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Daily Juice Company starts using imported oranges due to shortage caused by Chinese export demand BY NEWS REBECCA SULLIVAN AUGUST 1, 20173:38PM Daily Juice Company has started using imported oranges...

Daily Juice Company starts using imported oranges due to shortage

caused by Chinese export demand

BY NEWS REBECCA SULLIVAN AUGUST 1, 20173:38PM

Daily Juice Company has started using imported oranges in its juice, due to a

shortage caused by a thriving export market.

AUSTRALIAN juice companies are being forced to use imported oranges in their

products due to a shortage caused by a huge demand for our oranges in China.

The Daily Juice Company has changed the labels on its 2L and 300mL bottles of

orange juice, informing customers of the change.

“Due to a national shortage, our orange juice is currently 100 per cent imported yet

still 100 per cent tasty,” the label says.

A spokeswoman for Lion, which owns the Daily Juice Company, said the shortage

should only last for a few more weeks.

“There is currently a national shortage of oranges for juicing in Australia and as a

result we have moved to using 100 per cent imported juice to ensure we can continue

to manufacture Daily Juice and have it available for consumers on the shelves,” the

spokeswoman said.

“This includes a majority of imported orange juice from Spain, which is known for

its high quality juicing oranges,” she said.

“We expect to use large volumes of imported orange juice until around mid-August.

This is a short-term solution until the new local navel season is available.”

China is one of Australia’s biggest export destinations. This year, 40,000 tonnes of -

oranges worth $70 million, about one-quarter of all orange exports, will be shipped

to China, according to The Australian.

China’s growing middle class love Australian products — they’ve already caused

infant milk formula and beef shortages — and now that’s spread to fresh fruit.

Citrus Australia chief executive Judith Damieni told news.com.au in February that

Australia won’t need to start importing oranges from overseas.

Ms Damieni said the current shortage was partly fuelled by the record 2016 citrus

export season, which saw demand from overseas markets absorb the vast majority of

Valencia supplies before Christmas.

Normally, Valencias are in plentiful supply for Australian juice companies until at

least March.

“It will impact the availability or pricing of fresh Australian juice,” Ms Damieni said.

“Until the next wave of crop comes in, in June, it may impact on the supply of that

product.

“I don’t think we’ll see empty shelves, because there will always be a supply, but it

will just depend on the demand.

“But with this summer having been warmer for longer, that demand has gone up.”

http://www.news.com.au/lifestyle/food/drink/daily-juice-company-starts-usingimported-

oranges-due-to-shortage-caused-by-chinese-export-demand/newsstory/

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Page 8 of 11

Please read the article ‘Daily Juice Company starts using imported oranges due to

shortage caused by Chinese export demand’ and answer the following questions:

Questions

1.

a. Assuming oranges are sold in a purely competitive market, use the

supply and demand diagram to describe, ceteris paribus, a major factor

contributing to the price of oranges changing. In your discussion make

sure to explain the process of moving to the new equilibrium output

and price. (5 marks)

b. How will this impact the Australian Juice companies? (2 marks)

2.

a. Using the determinants of price elasticity of demand, discuss whether

you think the price elasticity of demand for oranges to be elastic or

inelastic. (4 marks)

b. Based on your answer in part 2(a), explain and illustrate hypothetically,

what should be the effect of the changing price of oranges on the total

revenue of the oranges wholesale market. (3 marks)

3.

a. Using appropriate diagram(s), outline the impact of a price support

scheme if it was introduced by the government to assist the suppliers in

sustaining the price of oranges? (5 marks)

b. What are the advantages and disadvantages of such a policy? (3 marks)

Oct 05, 2017
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