Monday 19th Nov, 2018

Australia faces battle for China grain market

Photo: Shutterstock
Photo: Shutterstock

AUSTRALIAN grain exporters and growers are well-placed to gain from China’s move to import grain and ensure food supplies.

That is the view of Philippa Jones, a guest speaker at the recent Australian Grains Industry Conference in Melbourne.

Ms Jones, director of the Beijing-based research and advisory group, China Policy, said China was seeking alternatives to simply producing grain domestically.

According to Ms Jones, in 2016, 22% of China’s cereal imports came from Australia, with 27% from the USA.

Some 13% were from Vietnam and another 10% from Ukraine.

But it’s not all good news for Australia.

“The Chinese have renewed their focus on agriculture as one of the keys to prosperity and they’re looking to ease control over investment access, speed up their free trade area strategy, and further open up inland and border areas,” Ms Jones said.

“In July they signed a Memorandum of Understanding with Kazakhstan that is oriented towards allowing exports to China, and they’re looking to develop a new competitive advantage in foreign trade.”

A slide showing a doubling of inland ports in China, a reminder to the Australian industry that the Asian behemoth had sources of grain close to home.

“China has announced it will build 17 new inland grain ports and that indicates their intent to import from neighbours,” Ms Jones told said.

“They have also set up 18 international agriculture demonstration zones, including at sites in Cambodia, East Timor and Indonesia, so the Australian sector needs to consider how to deal with the risk in China’s transition from self-sufficiency to setting the agenda for global trade.”

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