Farm export values rising, but more slowly

But the rate of growth for our farm commodity export values is slowing, partly because of reduced supplies of beef available for sale overseas, says a report from Rural Bank and Rural Finance.

The inaugural report, launched by Rural Bank and Rural Finance’s specialist insights team Ag Answers, studied Australia’s agri-food trade performance across nine sectors – cattle and beef, crops, wool and cotton, sheep, milk and milk products, wine, horticulture, sugar and seafood.

Wine, horticulture, sugar and seafood achieved notable gains, but beef and cropping remain the powerhouses of the Australian agri-food export market.

They accounted for almost $22b worth of exported produce – 48 per cent of Australia’s total agri-food exports.

Beef also overtook cropping as the country’s most valuable export commodity, despite its volumes and values slipping as supplies tightened last year.

The value of grain exports were also down, constrained by lower global market values, rising international export supplies into some Australian export markets and poorer yields from some drought-hit areas of eastern Australia.

However, NSW, the state recording the largest rise in the value of exports benefited largely from the past year’s unusually high chickpea prices and increasing sales of prepared food.

Export values from Victoria, Queensland and Western Australia last financial year were relatively unchanged on the previous year.

The 1.5pc year-on-year rise in overall agri-food exports last financial year was notably below the five-year average of 5.3pc.

Meanwhile, food commodity imports are rising at a much faster rate.

Rural Bank’s research showed while agri-food export values grew 1.5pc in 2015-16, the value of imports also grew 10pc in the same period, worth almost $18b in value.

Almost 40pc of all Australian agri-food products are exported to just three countries – China, the US and Japan.

South Korea held its place as the fifth largest consumer of Australian agri-food exports.

The value of exports to South Korea grew 12pc, largely due to its strong demand for beef, despite record high prices.

Rural Bank and Rural Finance’s agribusiness general manager, Andrew Smith, said the continuing increase in global demand for Australian agri-food products was encouraging.

“When you consider price volatility, seasonal challenges and the uncertain economic global climate, the result is testament to the quality of the products grown throughout this country,” he said.

Mr Smith noted further opportunities in Asia existed outside our major trading partners in Japan and China.

Indonesia (fourth), Vietnam (sixth) and India (ninth) had huge populations, and enormous scope for further market expansion.

“While the recent shift back towards economic protectionism in the west – in particular the potential breaking down of the Trans Pacific Partnership – has potential to slow global trade performance, the future for Australia’s food exports remain bright,.” he said.

“The world’s appetite for Australian agri-food continues to grow with each passing year and our ability to service this demand is vital for Australian agribusiness and the broader economy.”