POPULATION growth is expected to increase global food demand but Australia may have a battle on its hands to secure its market share ahead of a South American challenge.
The Australian Bureau of Agricultural and Resources Economics (ABARES), has prepared a report entitled South America: an emerging competitor for Australia’s beef industry, outlining some of the key issues.
According to the report, Australian agricultural exporters are well positioned to benefit from increased Asian food demand because of Australia’s proximity and ‘clean and green’ image.
But an expanding number of countries – including several South American nations – have been increasing their participation in international trade across many products.
The report states that Australia and South America account for about half of world beef exports.
“In May 2015, Brazil’s market access was further broadened when it gained access to the Chinese beef market,” the report states.
“Exports to China increased quickly, surpassing Australia’s exports to that market by December 2015.”
The report notes the implications of the Argentine Government’s removal of agricultural export restrictions in late 2015.
“This policy change is projected to significantly increase Argentina’s beef exports,” it says.
“There is minimal impact on beef export returns for Australia and the other South American countries.”
However, although Argentine exports are expected to increase strongly from a low base, the Argentine export price is not projected to be significantly lower than other exporters, and therefore
Argentine beef is unlikely to displace other suppliers from expanding shared markets.