May 19, 2020

Australia losing ground with food exports to China

China
exports
food exports
food sector
Bizclik Editor
2 min
Australia losing ground with food exports to China

As Australian food exports as a whole continue to grow, this overall increase has hidden the sharp decline the food sector has experienced in the market share in China. The Australian Food and Grocery Council has measured food imports across the region for a span of 20 years, and their analysis shows China’s food imports from Australia have halved, to 3.3 percent.

Gary Dawson, the chief executive of the council claims that the lost ground is due to competitors being more aggressive and better organised. France, Indonesia and New Zealand have a much bigger hold on the Chinese market, and continue to grow. Brazil is also beating Australia in this sector, through better infrastructure development. Australia’s food exports to Malaysia have fallen as well, to about 6 percent; over the same period, Indonesia has increased their share from 8 to 28 percent within Malaysia. Dawson has warned that the lost ground will require heavy investment to reverse.

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"If we continue to lose market share in China and other growing economies to our north, the optimistic predictions of a dining boom to follow the current mining boom will wind up being just hot air,” said Dawson. Many were hoping that an increase in trade within the food sector would make up for the current waning nature of the mining industry.

VISY executive chairmen Anthony Pratt has also come forth to say Australia has less than five years to capitalise on the opportunities Asia offers the food sector, and has claimed that accelerated depreciation is the key.

"Accelerated depreciation helps companies bring forward capital-intensive investments by reducing payback time. It's not a hand out. Companies still have to pay the tax, but they simply get to defer it," he said. "And food manufacturing is an ideal candidate for targeted accelerated depreciation because the food industry, our biggest industry, creates significant flow-on benefits."

The government is currently in negotiations with China about free-trade agreements, and the council is hoping for real commercial outcomes from the talks. They also want effective trade promotion, improved collaboration in research and development, and reduced costs. There are several things that are currently holding back the industry, including regulatory taxes like the carbon tax, the live cattle export ban, and the doubling of gas prices on the east coast of Oz.

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