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Tuesday, 5 June 1984
Page: 2571

(Question No. 662)

Senator Jones asked the Minister representing the Minister for Primary Industry , upon notice, on 29 February 1984:

(1) Does the Minister for Primary Industry consider jojoba farming is a sunrise industry in Australia.

(2) Does the plant have any commercial future in Australia; if so, where, when and for what commercial purpose(s).

Senator Walsh —The Minister for Primary Industry has provided the following answer to the honourable senator's question:

(1) The term 'sunrise industry' is generally considered to relate to industries which involve a high degree of modern technology. On this basis jojoba farming would not be said to be a sunrise industry.

(2) The Bureau of Agricultural Economics, in a study published in October 1982 stated that there was a lack of accurate information about the crop; estimates of yields, prices and costs vary greatly and make it impossible to make investment decisions on jojoba growing with the confidence and certainty associated with a decision to grow an established crop.

However, the BAE concluded that once established jojoba growing has a 65 per cent probability of being at least as profitable as the average of all farm industries and that there is a sufficient market and supply of suitable land to allow a moderate sized jojoba industry to develop in Australia.

Markets for jojoba products are complex and not well understood. Estimates of the potential world market for jojoba oil vary considerably. While many potential uses for jojoba products have been found, the size of these markets ( or jojoba's ability to penetrate them) has not been verified.

The BAE study found there are potentially three main markets for jojoba:

A very small and limited market for cosmetics.

A medium-sized market for high-grade waxes. It is uncertain whether jojoba wax will be able to enter this market to any great degree.

A large market for use as a lubricant and for bulk use in manufacturing and pharmaceuticals. Synthetic substitutes currently occupy the market at a competitive price. Hence, if jojoba is to enter this industrial market, it must have a guaranteed commercial supply at a competitive price.

If jojoba is to develop in Australia, its markets can be expected to be as a sperm whale oil substitute because this is a higher price for which jojoba is a close chemical substitute. Whilst there is now a ban on imports of all whale products into Australia there are, however, several synthetic sperm whale oil substitutes. In order to capture this market, jojoba would have to compete with these synthetic substitutes. Another possibility for jojoba to gain access to a large market in Australia lies in the market for general lubricants. However, to enter this market, jojoba growers would have to accept a lower price for the oil . The BAE analysis found that jojoba producers could not compete at this low price, but they may be able to gain a small segment of the lubricant market for more specialised oils which can command higher prices.

Whilst at this stage there is inadequate data with which to make an informed judgment about the commercial future of jojoba in Australia, it has been suggested that the most successful operations and locations will be those that are able to achieve higher yields and hence lower unit costs to remain internationally competitive in a period of forecast decline in jojoba prices.