Category Archives: Agriculture News

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China & Australia Industry Information Center CAIIC supports the Australian wine industry by providing advice to the Australian Government on matters related to wine including international market access, taxation and industry structure.

The department works with Australian winemakers and grape growers, industry representative bodies, other government agencies and international organisations to provide this support and advice.

The Australian Grape and Wine Authority (commercially known as Wine Australia) is the Australian wine industry’s statutory research and development, marketing and regulatory body, and is funded by levies. The Authority provides export data, market intelligence and other general information for the Australian wine industry.

The Australian wine industry is subject to a number of Commonwealth laws, from taxation to export regulation. The legislation specific to the Australian wine industry is the Australian Grape and Wine Authority Act 2013 and the Australian Grape and Wine Authority Regulations 1981. These provide for, among other things, the Label Integrity Program and the Register of Protected Geographical Indications and Other Terms.

The Act and regulations give effect to the Agreement between Australia and the European Community on Trade in Wine which facilitates wine trade with the European Union—the Australian wine industry’s largest export market.

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Meat, wool and dairy

China & Australia Industry Information Center CAIIC has a key role in promoting more profitable, competitive and sustainable food and agriculture industries, such as the important meatwool and dairy industries.

The meat and livestock industries produce and process meat products and live animals for domestic and export markets. Australia is one of the largest exporters of beef, mutton and lamb in the world, trade which is very valuable to its economy.

Beef cattle production is spread throughout the country, and carried out under varied conditions. Mutton and lamb production is often undertaken with wool production.

While red meat is a top agricultural export earner, there is growing interest in other meat product such as pork, game such as deer, goat and buffalo. Goat meat production is growing.

Wool production is a very common activity on Australian farms. In 2014-15 around 77 million sheep were shorn, producing 428 million kilograms of greasy wool. The value of wool produced in Australia for 2014-15 was $2.6 billion.

The dairy industry is also one of our biggest agriculture producers and Australia is a major exporter, one of the top dairy producers in the world. In recent years the export of live dairy cattle has been finding new markets, mainly in China. Australia’s dairy industry is highly regarded for its efficient production systems and product and systems innovation.

The department works with the meat, dairy and wool industries to improve their trading opportunities. Australia’s farmers benefit from the scientific advice and economic research findings it delivers and from the policies and programs it develops that help improve business, risk and resource management, and the development of innovation. The department quarantine services, export inspections and certification maintain our reputation for plant and animal health.

The department supports industry change and adjustment through policy and program development, and the uptake of new and innovative approaches along the value chain that help agriculture industries improve their responsiveness to the ever-changing market.

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Australia’s export performance in 2016

After a fairly lengthy hiatus (apologies, lots of travel plus some time off) I thought I’d mark my return to our blog by taking a look at what the latest set of annual trade data tell us about Australia’s export performance last year. My colleague, Edmund Tang, has already posted on the headline numbers regarding total two-way trade in 2016, so here I’ll focus in a bit more detail on the export side of the story.

The first thing to note is that, after having declined in 2015, overall export values increased by almost five per cent in dollar terms in 2016, rising by A$14.7 billion to hit A$330.3 billion.

Back in 2015, the total value of exports had been pulled down by a fall in the value of goods exports in general, and a sharp drop in the value of exports of minerals and fuels in particular. Last year, this story went into reverse, with strong growth in mineral and (especially) fuel exports working to push up our overall export performance. Exports of gold and of services also made strong, positive contributions to the aggregate outcome.

The bounce back in key commodity prices seen over the course of last year obviously played a large role in driving that overall expansion in export values.

Exports of minerals and fuels have accounted for more than 40 per cent of Australian exports by value since 2008, and after seeing their share decline over the past two years as falling prices outpaced increased volumes, the 2016 recovery in commodity prices saw a return to a share of more than 43 per cent.

Also worth noting in the context of shifts in our export structure is the continued rise in services in total exports: after falling to a low of about 16 per cent of total exports in 2011, the share of share had climbed back to 21.6 per cent by the end of 2016.

Viewed in volume terms, Australian exports have now outpaced global trade growth for the past five years: our export volumes were up almost eight per cent in 2016, compared to world trade growth running at closer to two per cent. Again, a significant part of that is a minerals and fuels story: greater export volumes are the product of capacity-expanding investment conducted during the mining boom. But volume growth also reflects three consecutive years of strong growth in services export volumes.

Digging into the details a bit further shows that, by product, Australia’s largest exports in dollar terms last year continued to be iron ore (comprising more than 16 per cent of exports by value) and coal (almost 13 per cent), followed by education-related travel services (approaching seven per cent). All top three exports repeated their 2015 ranking. Gold and natural gas swapped places in 2016 relative to 2015, however, with gold moving into fourth place.

Across the top ten exports, the largest increases in dollar terms were experienced by exports of coal and iron ore, followed by gold, education-related travel and personal travel services, with gold showing particularly rapid growth in percentage terms. Meanwhile, exports of beef, wheat, aluminium and professional services all declined in value last year.

By market, China remained Australia’s top export destination in 2016, comfortably holding on to the number one spot as the largest destination for our exports of goods and for our exports of services. Indeed, the rebound in the value of iron ore and coal exports to China mean that the decline in the share of exports going to the market that we’d seen in 2014 and in 2015 has now been partially reversed, although we are still below the peak share reached in 2013.

The rankings of our top four export markets were unchanged in 2016 from 2015, although the UK did swap places with India for fifth spot. That latter change reflected a dramatic surge (of more than 70 per cent) in the value of Australian exports to the UK – an outcome dominated by gold exports – which also drove an increase in exports to the EU as a whole. In absolute (dollar) terms, China still saw the strongest growth in exports, however, reflecting significant increases in the value of exports of iron ore and coal as noted above, as well as strong growth in service exports. In contrast, the value of Australian exports to Japan (reflecting a drop in LNG export values), the United States (which saw a sizeable fall in the value of beef exports) and ASEAN (petroleum and gold export values both down) all fell.

Finally, by region, East Asia continued to account for well over half of all of our export sales – about 64 per cent in 2016. As the chart below shows, however, most of the growth in exports to the region over the past decade has been driven by growth in the share of our exports going to China: Japan’s share has been sliding over the same period while the share of exports to ASEAN and to other Northeast Asian markets has been relatively stable across the last ten years.

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China’s chance to milk Australian dairy expertise

Thirty Australian dairy industry representatives are in China on an Austrade-led trade mission to demonstrate their products, services and technology at the China Dairy Expo.

It is an opportunity for the Australian representatives to meet with dairy firms from around China, including commercial leaders such as Bright Dairy, Mengniu, Yili and New Hope, which are increasingly active on the global stage.

Organisations participating in the Australia Pavilion at the expo include CSIRO, Wellard, Austrex, Genetics Australia Cooperative, Hay Australia, United World Enterprises, Selected Seeds, Standard Commodities Australia, the Australian Wool Testing Authority and McLanahan Corporation.

Austrade’s Trade Commissioner in Chengdu, Christina Goodman, said the mission aims to position Australia as an international leader in dairy production.

“Australia has a reputation for producing healthy and safe dairy products. The mission supports Australia’s role in China as a long-term supplier of dairy products at the top end, and a partner of the Chinese dairy industry satisfying the mass market,” Ms Goodman said.

“Chinese agribusiness companies now operate around the world. The long-term opportunity for Australian industry to work with these companies through services, technology, R&D and product supply now represents much more than just a China market opportunity.”

The delegation will visit the Jiangsu provincial capital Nanjing, home to some of China’s leading agricultural research institutes, including Nanjing Agricultural University. It will also visit Heilongjiang in the northeast, a significant dairy production region, and Nestlé’s US$10 million Dairy Farming Institute, which features a demonstration farm with Australian-born dairy cattle, and sophisticated research and training facilities.

“The China market can be thought of as many regions, not just one. Every province has differences, and in the agribusiness sector, some of the biggest opportunities are in the provinces away from the municipalities of Shanghai and Beijing,” said Ms Goodman.

The China Dairy Expo runs from 16-18 June; the trade mission runs until 21 June.

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