Previously one of our most lucrative trading partners, China and tensions with Australia have escalated in recent months, with rural commodities bearing the brunt.
At a Rural Media & Communicators SA/NT event, former NT Cattlemen's Association chief executive Tracey Hayes and Australian Grape & Wine Inc chief executive Tony Battaglene spoke about beef, wine and the Chinese market.
Ms Hayes said China was a key market, but had been declining in recent years, before the sharp drop in 2020.
From holding a 37 per cent market share in China's beef imports, Australia has dropped to 10pc.
Ms Hayes said this was not only attributable to the worsening trade tensions.
"While we talk about diversifying our markets, customers talk about diversifying suppliers," she said.
Other key competitors, such as Uruguay, Brazil and the United States, were increasing their foothold, with Brazil able to produce beef with an average export price of US$4.45 a kilogram, compared to Australia's US$5.86/kg, with a herd size 10 times the size and cheaper cattle slaughter costs.
But Ms Hayes said there were added complications in the past 12 months, with increased screenings at ports and distribution centres creating bottlenecks.
Wine has been even harder hit, with China traditionally worth about 40pc of Australia's exports by value.
"In a three-month period in 2015, we sold $325 million of wine into China," Mr Battaglene said.
"That's down to $12m in the past three months."
While he said diversified markets was important - Australia sells to more than 100 markets - he said China had been lucrative.
"You can't blame people for following the money when it's paying top dollar," he said.
In August, despite being a high-value market, Australia was accused of "dumping" wine into China, setting off months of investigations and negotiations.
Mr Battaglene said he spoke to people in the barley sector for advice to try and negotiate the upheaval, while the Australian government was helpful.
He said support remained for Australian product from customers and distributors.
"We need to be positioned to pivot back to China when we're able," he said.
But he warned it could have a significant impact in the short term, particularly if next year's vintage was good.
"It will have an impact on grape prices - it's going to be a blood bath next year," he said.
"It is really difficult to get a high-value market to replace $1.3 billion overnight."
ACTIVISTS HAVE SIGHTS SET ON INDUSTRY
Similar to animal activists for the red meat industry,Mr Battaglene says there is a strong anti-alcohol lobby using the past 12 months as an "opportunity to attack a weakened industry".
"Social license is the single biggest issue we face - bigger than China," he said.
"It could close us down."
He said there were some well-funded groups that were intent on reducing all consumption of alcohol, not just harmful consumption.
Mr Battaglene said it was important to be part of the conversation and demonstrate the work the wine industry was doing in this space, such as limiting advertising aimed at children.
He said there was also big growth in the sector of non or low alcoholic beverages.
Ms Hayes said it was important to focus on the good work being done by industry and get that message out there.
She said the Australian live export sector had developed a traceability program that went beyond our shores.
"We're exporting animal welfare best practice and by nature improving animal welfare outcomes overseas and not just at home," she said.
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Elizabeth Anderson
Editor of Stock Journal.
Editor of Stock Journal.
