New ‘no rules’ unsettles agricultural exports



Uncertainty from trade wars between the US and China has had an impact on the Australian agricultural sector, undermining its exports, according to an AgriFutures report which urged leaders to restore stability for agricultural commodities.
Also, the research found a wide range of both risks and opportunities for Australia’s agricultural interests, noting that some products were likely to fare better than others.
AgriFutures’ senior manager of business development, Jen Medway said that a good example was the dairy industry, which could potentially benefit from trade opportunities with China on the back of additional tariffs imposed on US dairy products.
However, a prospective US-Japan free trade agreement could negatively impact the industry as US producers disadvantaged in the Chinese market could gain improved access to Japan.
Following this, the trade wars were expected to have a limited impact for the Australian wool industry as the relatively small size of the US wool export market to Asia would buffer any significant uncertainty for Australian wool exporters as a result of the increased tariffs.
Another area which would see increased competition is in Australia’s fresh, chilled and frozen beef exports due to risks identified in Australia’s two biggest beef export markets – Japan and the US, the report found.
AgriFutures Australia managing director, John Harvey, said that the importance of the report findings was to put rigour around our understanding of the top line impacts for agriculture products because of the trade wars.
“It will inform Australian industry input on how best to ameliorate the detrimental side effects of current and possible future trade measures,” he said.
“The longer this period of uncertainty lasts, the more commercial decisions will need to be made by Australia’s agricultural stakeholders facing the prospect of sudden and unpredictable policy changes at the global level.”
The key take-away message from the report was that as a medium-sized, open economy dependent on trade to underpin economic growth, Australia would benefit significantly from the confidence and predictability inspired by the smooth operation of the international trade regime.
Recommended for you
While the last several months have seen increased market volatility, particularly in the US, advisers said there are multiple reasons why there has been an increase in defensive asset flows.
Scarcity Partners believes the dynamics playing out in the managed account and outsourced chief investment officer market are “here to stay” based on positive developments in financial advice.
Former executive chairman of failed stockbroker BBY, Glenn Rosewall, has been charged with aiding, abetting, counselling or procuring BBY’s dishonest conduct in relation to a financial service.
Fidelity International research has revealed Australian investors are significantly more optimistic about the market outlook and feeling more comfortable than their APAC peers, despite ongoing market volatility.