Spreading export risk

Spreading export risk

Grain
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Australia's ag industry must look at multiple customers rather than focusing too heavily on just one or two big ones.

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Andrew Weidemann, Grain Producers Australia, says it is bad business to be over reliant on just one customer.

Andrew Weidemann, Grain Producers Australia, says it is bad business to be over reliant on just one customer.

Australia's agriculture sector needs to look at more than just the headline number when making their trade decisions and also factor in the ongoing healthiness of a diversity of trade partnerships.

Andrew Weidemann, Grain Producers Australia chairman, said while it was easy to see why exporters focused on high value markets, such as China, that generated a premium over other origins, the industry as a whole needed to ensure it was not over-reliant on a single buyer.

He said the case of China, which accounted for around two thirds of Australian barley exports before abruptly implementing 80pc tariffs on our product, showed the perils of dealing too much with one buyer.

Mr Weidemann said while Australian grain growers wanted to retain the long-term links that have been forged with China, the industry needed to diversify.

"The Chinese market has been very good to the Australian grains industry but what we have seen in barley is what can happen when you don't spread yourself around over multiple buyers, there is too much reliance on just the one and that gives them a lot of power."

He said he thought it would be the role of organisations such as newly formed Grains Australia to help promote the industry in new markets, saying that commercial businesses would tend to focus more on the highest value sale on the day.

"They need to do what is best for their business and that's fine so that's why we need an organisation like Grains Australia to take that more long term view for all of the industry," he said.

Mr Weideann said he was not sure that the new markets taking the slack from the loss of Chinese barley purchases would become as high value as China was, but said they were very important, both in terms of the volume sold and the diversity of customers it provided.

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