Olam warns Victoria and South Australia’s bee ban set to drive food prices higher

One of the world’s biggest farming and food trading companies warns different state rules over the transportation of beehives will potentially drive food prices higher.

Sunny Verghese, CEO of Olam Agri, is calling for greater co-ordination between the states to maintain food security. Picture: NCA NewsWire / Dan Peled

Australians risk paying even higher prices for some groceries, with one of the world’s biggest farming and food trading companies warning different state rules over the transportation of beehives will potentially drive inflation higher.

About one-third of Australia’s food supply from almonds to meat – through the crops livestock consume – is dependent on bee pollination, with the insect contributing about $14.2bn to the economy annually.

But pollination-dependent farmers in the southern states are facing smaller yields because the Victorian and South Australian governments are yet to lift their restrictions on importing beehives from NSW after varroa mite was detected near the Port of Newcastle in June.

This has effectively halved the number of bees available to pollinate crops and is despite the NSW government allowing most beekeepers to move hives more freely within the state after successfully containing the varroa mite outbreak.

Sunny Verghese, the chief executive of Singaporean conglomerate Olam, said the lack of a co-ordinated response between the states is likely to drive further food price inflation.

“It’s a bit like the pandemic-induced food price inflation and Russia Ukraine war-induced food price inflation where governments have looked at their own food security needs and imperatives and have made many mistakes on increasing tariffs and non-tariff barriers for the free movement of food and food staples,” Mr Verghese said in an interview with The Australian.

“This has exacerbated the food security problem.

“We know that this happens unless of course there is full co-operation, in this case within Australia between the states and within the states on how beehives are allowed to be moved.”

A deadly varroa mite on the back of a honey bee.

Olam – listed on the Singapore Stock Exchange and 54 per cent-owned by the Singapore government’s investment arm Temasek – grows and buys crops from 4.7 million farmers and is a world leader in the trade of nuts, spices, cotton, coffee, chocolate, sunflowers, soybeans, rice and dairy products.

Almond pollination began about a week ago and Mr Verghese said the company had half the number of beehives available for its 15,000ha of orchards in Victoria’s Sunraysia region.

“The varroa mite incursion into Australia could not have come at a worse time for the almond industry on the eve of pollination,” he said, adding that many Queensland beekeepers did not participate in pollination in the southern states this year.

“For Olam this has meant that we are between 2-2.5 hives a hectare against a normal stocking rate of 4.5-5 hives a hectare. This does represent a significant risk to an adequate pollination.”

The beehive bans have also disrupted the pollination of about 44 per cent of the orchards of rival almond grower ASX-listed Select Harvests, which has a market value of more than $595m and normally rents about 50,000 hives during this period.

Almond pollination began about a week ago. Picture: Sue Neales

About 2700ha, or 29 per cent, of Select Harvests’ orchards are within NSW and were affected by the initial hive lockdown. An additional 1000ha, or 11 per cent of the company’s orchards, are dependent on NSW beehives, while 400ha, or 4 per cent, rely on Queensland hives.

The company has deployed several mitigation strategies, including sourcing additional hives and reviewing hive density in orchards.

Meanwhile, Olam has been scattering hive drops across orchards and incorporating sugar inside hives at full block to stimulate greater flying activity among bees to make the most of the hives it has been able to source.

“The impact of poor pollination in almonds will have a massive impact on the industry which will in turn impact local communities, and significantly reduce export income from one of Australia’s largest horticultural industries,” Mr Verghese said.

“Moving forward, Olam seeks a more co-ordinated federal response to the varroa mite risk as opposed to an inconsistent state-by-state approach. We would also seek that a measured response must take into consideration all stakeholders – beekeepers, honey production, pollination services.”

NSW Agriculture Minister Dugald Saunders was confident the state had contained the varroa mite outbreak and had succeeded in tracking where the parasite had travelled. “Thorough research and testing shows the risk of spread within a yellow zone is no different to that of the statewide blue zone, so these yellow areas will be dissolved and will now fall under the same rules as the general emergency zone,” Mr Saunders said.