China’s trade sanctions on Australian agriculture force farmers to find new markets



Farmers who have fallen victim to the multibillion-dollar trade feud between China and Australia are seeing signs of optimism as they find new customers for their products.

Barley growers say they get good prices in Middle Eastern and Asian markets, while wool, wheat and dairy products are largely unaffected by trade bans and, despite the impacts on some slaughterhouses, sales of red meat to China remain high.

Cotton producers are also making inroads into markets such as Indonesia, Thailand, Vietnam and Bangladesh, and the wine industry has been active in finding new markets.

But the lobster industry has struggled to fill the void caused by the loss of the Chinese market.

Watch out for comments on China

The agriculture ministry will not say how much it cost farmers the higher tariffs and unofficial tariff bans on a range of staples, including barley, beef, wine and cotton.

“China has not imposed sanctions on Australian agriculture, fisheries and forest products,” a spokesperson said.

He also pays attention to how he refers to the line:

“Australia‘s exports of agricultural, fishery and forestry products have faced a number of challenges, including drought, bushfires, COVID-19 and disruption of regular trade flows of certain commodities in the Chinese market. . “

The National Farmers Federation has speculated that farmers could lose more than $ 35 billion over the next decade due to the trade fallout, although it is not known how the lobby group arrived at that figure.

Signs of recovery in barley exports

Eight months after China introduced high tariffs on barley, Australia’s largest grain handler, CBH Group, says growers are paid at prices similar to when its most valuable customer was buying .

“For the Australian barley industry, yes, 2020 has been a tough year, but we are certainly recovering here and prices are pretty much back to where they were before the anti-dumping tariffs,” said Jason Craig, Director marketing and sales of the CBH group. .

Jason Craig of CBH Grain is hopeful that a trial to send barley from WA to Mexico will help fill the void left by China.(ABC landline:)

Mr Craig estimated that 13 million tonnes of barley had been harvested in Australia this summer.

He said strong demand from feed markets in the Middle East and Asia and an Australian first attempt to sell premium malt barley to brewers in Mexico helped replace lost trade to China. .

“Right now it’s a 35,000 tonne shipment worth over $ 10 million, so it’s a big test,” he said.

Red meat still sells in China

Australia continues to sell a lot of agricultural products to China.

Exports, including wool, wheat and dairy products, have so far been largely untouched by commercial spat and, despite the restriction of some slaughterhouses, sales of red meat to China remain high.

In 2020, six Australian slaughterhouses were suspended from trade due to labeling issues and meat contamination claims.

Two other meat factories in Victoria are also waiting to resume selling beef and lamb to China after staff were infected with COVID-19, but Australian cattle prices are at record highs.

Meat and Livestock Australia (MLA) chief executive Jason Strong said the impact of tariffs on exports had been minimal.

Australia’s recovery from the drought has seen livestock prices soar to record highs, and Strong said “finding a home for beef that won’t go to China is not a major challenge” .

China was Australia’s third largest market for red meat last year.

“We sent them 197,000 tonnes of beef, so this was the second most important year we sent to China and they were only number three about 25,000 tonnes less than the United States,” he said. Mr Strong said.

Cotton spreads risk, yields remain high

Australia's cotton industry has diversified since China stopped buying
“It’s not just pessimism,” cotton analyst Pete Johnson said of China’s exit from the Australian market.(South Queensland ABC: Nathan Morris)

Cotton growers are also expected to receive high yields for their products in 2021, as the industry expands into markets in Indonesia, Thailand, Vietnam and Bangladesh.

Australian growers and shippers say Chinese spinners were ordered last October to stop buying cotton grown in Australia, and the billion-dollar-a-year trade has essentially stopped.

Toowoomba-based cotton trader and industry analyst Pete Johnson estimated growers would lose a premium of $ 10-20 per bale without China in the market, but returns to growers this year are expected to be ” historically high “.

“Would we prefer that the Chinese were there to take our cotton?” Absolutely, but [we are] spread our risk across a range of other markets across the subcontinent and Asia, ”said Johnson.

“Spreading this risk is ultimately not a bad thing for the industry.

Winegrowers are turning to new markets

In the two months since China introduced tariffs on Australian wine, the value of exports has fallen by $ 250 million from the same period last year.

The loss of such a lucrative market is disappointing for New South Wales winemaker Bruce Tyrrell, who has spent much of the past year seeking new customers.

“They’re not going to be huge, but they’re good markets – rich countries stepping up their level of sophistication, so in this case drinking wine goes hand in hand,” he said.

Australia’s wine industry will also look to other Asian countries, parts of Africa and the United States.

Mr Tyrrell said 60% of Australian wine is exported, and while it might be nice to think the domestic market could absorb some of the losses, it was unlikely.

Road to recovery unclear for lobster industry

For the Australian seafood industry, which sent nearly 95 percent of lobster exports to China, the market is more difficult to replace.

Louise Hart, who owns a family-owned fishing business on Tasmania’s west coast, says she’s been operating at a loss since China stopped buying last November.

“We’re not counting on China coming back at all – no,” Hart said.

Lessons to learn
Louise Hart hopes other exporters will learn from her industry’s experience trading almost exclusively with China.(Provided: Louise Hart)

Ms Hart is uncertain about the future of her industry when the New Year’s quote begins next month.

“We don’t know if we’re going to fish. Will the buyers be able to sell them at any price, or will they just sit in their freezers or tanks. We really don’t know,” he said. he adds. Mrs. Hart said.

Government looks to EU and UK

Trade Minister Dan Tehan said he hoped new trade deals with the UK and the EU, due this year, would help exporters stop trading with China.

“What these free trade agreements will do is give us access to an additional 500 million consumers at lower prices for our exporters,” Tehan said.

Watch this story on ABC TV’s landline at 12:30 p.m. Sundays, or on iview.



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