Friday 22nd Sep, 2017

Key exports steady with wine continuing growth

merlot grapes on the vine

IN THE year to June 2017, Australian wine exports rose by a handy 10% year-on-year in value terms, and by 7% in volume, according to Rabobank.

“Importantly for industry confidence, this marked the second consecutive year of export growth after ten years of contraction,” according to the August Agribusiness Monthly report.

China was the dominant driver of growth in wine exports. Shipments to this market rose a whopping 44% year-on-year in value terms.

“Australian winemakers are capitalising on rising demand for imported wines, increased market access afforded by the recent FTA, appreciation of Australian wine styles, and the favourable image of Australia as a premium supplier,” said Rabobank.

In analysing sectoral trends and developments in other key commodities, Rabobank notes that during July a stronger dollar reduced export returns both in the dairy and lamb export markets.

Rabobank does expect a weaker Australian dollar in the coming 12 months but it is a question of timing as Australia dairy exporters enter a key selling season.

The sector is also waiting for news of production registration in China for infant formula. Initial details from China’s Food and Drug Administration show 22 companies have a total of 89 products approved. Only five international companies (no local companies) have been approved.

In line with the total export trend in beef, exports to all major markets are up year-on-year, says the report.

“Australian beef exports for July were 15% higher year-on-year as we reach the point in the year where 2016 export volumes declined dramatically.”

Off the back of increased production, exports for the month of July increased for both lamb (up 35% year-on-year) and sheepmeat (up 47% year-on-year).

“Lamb exports experienced strong year-on-year increases in the Chinese and US markets, while sheepmeat experienced more moderate gains in these markets,” said Rabobank.

Earlier than expected commodity restocking by the Chinese also pushed shipping rates unseasonally higher in July.

“Whether this equates to lower shipping rates in Q4 2017 and Q1 2018, will be of interest to Australian grain exports,” said Rabobank.

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