Export trade performance of agricultural products
– the good and not so good news

Australian Farm Institute (AFI) research currently underway provides some insights into the changing patterns of Australia’s agricultural trade, highlighting that while Australia’s export market share has grown for some commodities over the past 50 years, the market share enjoyed by other commodities has decreased.

AFI has recently commenced a research project entitled ‘Strategic Markets and Trade Outlook for Australian Agriculture’. This research project is supported by funding from the J.G. Boswell Company of California, and involves the development of a comprehensive database of Australian agricultural trade data, as well as data about agricultural trade developments in the major export markets in which Australian agriculture competes.

Much of the data gathering and some of the data analysis associated with this project has been completed. The data gathered to date includes information that enables a comparison to be made of the export trade performance of different Australian agricultural products. Some Australian agricultural commodities have performed reasonably well by increasing market share in export markets over the last 50 years, while other agricultural products have lost market share.

Australia remains a leading exporter of greasy wool, being the source of 50% of total world exports. Australia’s  market share of greasy wool exports has, however, declined significantly from the 60–70% levels which were the norm during the 1990s. This corresponds to falling numbers of sheep shorn across Australia each year and the disposal of the wool stockpile that existed at the time of market deregulation.

Figure 1:    Export trade performance of select Australian agricultural commodities.

Sources:     UN comtrade, Australian Bureau of Statistics, AFI analysis.

Some of the success stories illustrated in the analysis include sheep meat exports and some livestock feed and industrial grain commodities such as barley. The volume of sheep meat exports from New Zealand (the largest sheep meat exporter) have remained relatively static over the last 50 years, whereas Australia’s sheep meat exports have grown by over 250%. A shift towards running dairy cows instead of sheep in New Zealand has limited the potential for that nation to meet increasing world sheep meat demand, whereas lower prices for wool have encouraged Australian sheep farmers  to focus more on breeding sheep for meat production.

Australian barley exports have increased significantly over the last 50 years. Australia is now one of the largest barley exporters globally with much of the growth in demand for barley stemming from large Asian countries such as China. The drivers behind this demand include both feedgrain use for intensive livestock feed industries, and industrial uses for processing products such as malt and ethanol.

Wheat and wine exports have also been highlighted in the preliminary data analysis for a number of reasons. Australian wheat exports have been increasing at a similar pace to world exports, and as such Australia has maintained consistent market share as the world’s third largest wheat exporter. However, competition from developing regions such as Eastern Europe is increasingly threatening this position. The wine industry is an example where competition from developing export regions such as South America has impacted Australian wine exports. Australian wine exports accounted for nearly 10% of world export volume between 2005 and 2009, but the industry has since faced increased competition in export markets.

Apples and pears are examples of Australian agricultural commodities that have experienced a major decline in world export market share over the last 50 years. In the 1960s, Australian apple and pear exports accounted for nearly 10% of world exports. Since that time, global competition in these markets has intensified, and the Australian industry has increasingly focused on domestic market share rather than findings ways to satisfy both domestic and export market opportunities.


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