Agriculture exports behind China reliance

The thirst for premium Australian agricultural produce among China’s middle class has driven exporters to concentrate on that market.

Australia’s heavy reliance on China has been questioned after diplomatic tensions were linked to tariffs on barley and restrictions on some meat exports.

Agriculture Department deputy secretary David Hazlehurst told a parliamentary inquiry exporters were behind the market concentration.

“The very significant price premiums of China have led to it being worth the risk. The commercial judgment is that it’s worth the risk,” he told the committee on Tuesday.

Labor MP Ged Kearney asked if there was a role for government in manipulating markets to encourage diversification.

Mr Hazlehurst said the department’s focus was on opening access to markets and providing information.

“We don’t intervene. What we tend to do is look for opportunities wherever they might lie,” he said.

He said commercial interests generally were most efficient in responding to changing market conditions.

Agribusiness Australia’s Mark Barber also said exporters were behind the focus on China.

“Primarily, the concentration on China has probably arisen by commercial decisions being made by active participants in that market,” he said.

Mr Barber said while coronavirus response and geopolitical movements impacted agriculture, both were dwarfed by “greatly positive” weather.

“Seasonal conditions on east coast and the turnaround on the drought have had by far the greatest impact on the sector,” he said.

Jared Greenville from ABARES, the government’s agriculture forecaster, is confident Australian farmers can break into new markets in India and Indonesia.

“We’ve got a couple of really strong potential growth markets we see on the horizon,” he said.

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