Ginger worth its weight in gold
All that glitters really is gold in the world of crystallised ginger.
Lack of supply coupled with high demand has been pushing up prices for ginger and macadamia nuts, says Buderim Ginger chief executive Ron O'Grady.
However, a raging Australian dollar, supply shortages due to disease and natural disasters, as well as a struggling tourism industry have taken their toll on the Queensland-based company.
As well as supplying ginger and macadamias, it operates the iconic Ginger Factory tourist attraction at Yandina on the Sunshine Coast.
"It's been an adventure for the ginger industry," O'Grady says of the past two years for the ASX-listed company.
"All of these commodities are tracking at record high prices, which is helping us fight back against the Aussie dollar."
"We'd love the dollar to go back to 70 cents so all the exporters could throw a big party."
Buderim Ginger is the country's only ginger producer and processor, having started some 60 years ago as a growers' cooperative.
O'Grady says ginger production in Australia has been affected for the past two years by pythium blight, a plant fungus that causes the ginger to rot in the ground.
"We're just now getting on top of the impact of the shortage," he told reporters.
"It hit us quite quickly and we weren't ready, so we've short-supplied some of our customers, but we've caught up now."
O'Grady says severe drought affecting the Hawaiian macadamia harvest, plus the pythium disease causing the Australian ginger crop to fall short by 1,000 tonnes, contributed to an after tax loss of $2.6 million in 2010.
The company's balance sheet also suffered from 36 per cent drop in sales revenue from delayed nut fall and harvesting of its macadamia crop.
However, O'Grady says the company has managed to combat the ginger shortage by sourcing the product from Fiji and China for use in its international exports.
"We own a big slice in Fijian ginger industry, which is a big producer and has solved our shortage concerns," he says.
While all products for the domestic market are still produced using locally grown ginger, export products to markets in Asia, Europe and the US have been supplemented by a bumper Fijian crop.
O'Grady says the high Australian dollar, trading around the 107 US cent mark, is making it tough for exporters and the tourism industry.
"Tourism was belted by global financial crisis, however it's picking up again now."
He says a study has shown 54 per cent of Queenslanders have visited the ginger factory, as have more than 25 per cent of interstate visitors.
"We've recently opened a chocolate factory in the tourism precinct here at Yandina, so our tourism arm is getting a facelift," O'Grady says.
Ginger processing accounts for about 30 per cent of Buderim Ginger's core business, while macadamia nuts, baking and tourism make up the rest.
Buderim Ginger shares have dropped 77 per cent since early August 2008 and are currently trading at 10 cents.
Source: AAP NewsWire
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