THE total value of Australian agri-food exports has increased for the seventh consecutive year - up by $3.9billion to almost $50 billion - according to Rural Bank's 2016/17 Australian Agriculture Trade Performance report.
This upsurge in export value is predominantly due to the bumper year for Australia's grains and fibre exports, which resulted in the cropping export value rising by $3.7billion last year alone. Cropping overtook beef and cattle as the most valuable agricultural export sector in 2016/17, thanks to a 49% increase in production, more than offsetting lower export prices for wheat and coarse grains.
Australian wheat exports to India rose by 920% after wheat tariffs were reduced, while Indonesia, the Philippines and Vietnam all bought significantly more Australian wheat. Volumes of Australian canola increased by 85% with strong European demand also giving a boost to prices. Legume volumes were also up 85% over the past 12 months, with subcontinent markets soaking up this extra volume.
Conversely, beef and cattle export values declined by $1.8billion, as supply tightened and competition from the USA and Brazil heated up in Asian markets.
The value of dairy exports also fell by 1.3% over the year, with production declining across Australia.
The annual report is compiled by Rural Bank's specialist insights team Ag Answers and provides in-depth analysis of Australia's agri-food trade performance across cattle and beef, crops, wool and cotton, sheep, dairy, wine, horticulture, sugar and seafood.
Rural Bank general manager agribusiness Andrew Smith said while this year's growth is unlikely to be repeated in 2017/18, the long-term outlook remains positive.
"This year's value increase in cropping was largely to do with exceptional seasonal conditions that we haven't seen a repeat of this year. However, the long-term trend of expanding international markets will continue to drive value in Australia's exports.
"Australia continues to capitalise on the growing diversity of Asian demand. Where one commodity sees a decline, another makes up for it, a pattern that has helped mitigate declines in dairy, horticulture and cattle and beef,” Mr Smith said.
While China reduced imports of Australian cotton, India took up the slack, increasing its intake of Aussie cotton by a staggering 569% or $326million. Bangladesh imports of Australian cotton also increased by 270%.
Despite reducing its intake of Australian cotton, China renewed its appetite for Australian wool, which supported a 14% increase in the value of the commodity exported. This growth is expected to continue.
Mr Smith said cotton should continue its value growth in the coming year as even more land is utilised for cotton production.
"While we expect the value of beef exports to be flat over the short term, over the medium term we see a slight uptick as demand from Asia grows,” he said.
"Demand for dairy products is starting to increase, providing our dairy farmers some optimism for the future.”
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