Australian agricultural exports value down but set to rebound to record levels
The value of Australian agricultural exports reached $49.6 billion in 2020/21, a decline of 0.8 per cent from 2019/20. However, agricultural exports are expected to rebound over the year ahead, according to Rural Bank’s Australian Agricultural Trade 2020/21 report.
Following a challenging year marked by year-on-year declines in export prices for many commodities, reduced red meat production and tightening trade restrictions to China, export value of most commodities are expected to bounce back strongly thanks to favourable production and demand outlooks as key export markets recover from the impacts of COVID-19.
Only two commodities experienced an increase in export value – cropping and dairy. The value of cropping exports increased by 73.3 per cent at a value of $5.6 billion. The dairy industry, the only other sector to experience export value growth, saw a 7.3 per cent (+$184 million) increase.
Rural Bank’s Simon Dundon, General Manager Sales Partnerships and Marketing, said a bumper year for cropping exports helped to mitigate a year of downturn for most commodities.
“While most commodities felt the ongoing effects of both weakened demand due to COVID-19 and trade strain, Australian agriculture began to successfully diversify into multiple export markets as it navigated restricted access in varying commodities to China.”
Exports to countries outside Australia’s top five markets (China, Japan, US, Indonesia, South Korea) increased by $4.3 billion (+20.8 per cent) in 2020/21. China remained Australia’s top export market, accounting for 21.8 per cent of total exports, despite a decline of $3.8 billion (-26.2 per cent) over the year.
“The coming year is looking very positive for Australian agriculture. Red meat, dairy, wool, horticulture and wine should grow in overall value, thanks to improved seasonal conditions across much of the country, which when coupled with rebounding commodity prices, should lead to growth in export value in the coming year - possibly the highest on record,” Mr Dundon said.
“In addition, the remarkable diversification of export markets demonstrates the adaptability of Australian agriculture and this trend is expected to continue. The past year saw promising growth into Saudi Arabia, Vietnam, Indonesia, Belgium and Thailand.”
“No single market will fill the vacuum created by Australia’s current restricted access to China, but continued growth into a range of other markets and progress toward the implementation of free trade agreements with the European Union and UK should provide Australian farmers with other opportunities for long-term growth.”
New South Wales, South Australia and Western Australia were the only three states to record export growth in 2020/21, thanks to strong performance in the cropping sector. The remaining states all recorded a decline in export value.
“Victoria remained Australia’s highest value export state at $13.3 billion, followed by New South Wales ($8.9 billion), Queensland ($8.5 billion) and Western Australia ($7.9 billion),” Mr Dundon said.
Due to a variety of factors including labour shortages, trade restrictions and logistical issues, all other commodities experienced a decrease in export value. Beef and cattle experienced the largest decline in total value at -$3.3 billion (23.4 per cent), while cotton experienced the greatest year-on-year decline in percentage terms at 34.3 per cent (-$330.3 million).
Other industries that experienced a decline included sheep at -$560 million (12.6 per cent), wine at -$273 million (-9.4 per cent), fruit at -$267 million (17.4 per cent), seafood at -$152 million (11.9 per cent), nuts at -$78.6 million (-7.9 per cent), wool at -$47.4 million (-1.9 per cent), sugar at -$8.2 million (-0.5 per cent) and vegetables at -$6.6 million (-2.2 per cent).
Rural Bank’s Australian Agricultural Trade 2020/21 report focuses on the value and volume of Australian agriculture to major global markets on a national, state, and commodity level.
View the full Rural Bank Australian Agriculture Trade 2020/21 report.
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