Ag exports well positioned amidst global uncertainty

AUSTRALIAN agriculture is well-positioned to withstand the slings and arrows of a difficult global trading environment, the June quarter commodities report from Department of Agriculture, Forestry and Fisheries has revealed.

According to the report, outlook for Australian agricultural exports “remains resilient”.

Demand from China, Australia’s largest agricultural export market, was expected to remain robust, backed by Chinese fiscal and monetary stimulus measures.

“While a further softening in global demand presents a downside risk, Australian exports prices will likely be supported by tightening global grain stocks, resilient demand for Australian red meat and a low Australian dollar,” the report stated.

The report also predicted Australian exports of things like meat products would be able to withstand the imposition of 10% tariffs.

“The United States is an important market for Australian beef and other meat products, representing almost 80% total Australian agricultural export values to the US in 2023–24 and almost one third of total Australian meat exports,” the report stated.

“US demand for Australian beef is expected to remain robust given existing market access arrangements, declining US beef production and a low Australian dollar.

“However, any domestic substitution to cheaper protein alternatives – as import prices rise – represents a downside risk to US demand.”

According to the report, US demand for Australian exports had increased by an average of 4.1% per year for the last five years.

While challenges were acknowledged, the report was largely positive.

“Changes to global trade flows due to trade policy also have the potential to increase demand for some Australian agricultural exports in a range of overseas markets,” it stated.

“Expanding trade barriers globally could lead to agricultural export diversions in global markets, changes in relative competitiveness among exporters, and price fluctuations among substitute goods.”