Global economy providing opportunities for Australian agriculture
1 March 2016
A relatively weak Australian dollar, newly signed free trade agreements and strong international demand are expected to provide ongoing support for Australian agriculture in world markets.
Setting the scene for the 46th ABARES Outlook Conference, ABARES Executive Director, Karen Schneider, said these factors would underpin future opportunities for agriculture in export markets.
“The weaker dollar has supported average export prices in Australian dollar terms across the board, and contributed to favourable farmgate prices. We’re forecasting the gross value of farm production will reach a record high of more than $60 billion in 2016–17 and support exports of around $45 billion.
“The recent trade agreements finalised with major regional trading partners and new market access protocols will provide opportunities in both new and established markets.”
Internationally regarded economists Saul Eslake and Wim Boonstra (Rabobank) also helped set the global economic scene for Australian agriculture.
“The real world economy is in better shape than market turmoil suggests, but risks to growth do exist, particularly in Europe,” Mr Boonstra said.
“The global economy will at best show a fragile recovery, but Australia’s agriculture sector will have unique regional opportunities.”
“Australia probably derived more benefit from Chinese growth and industrialisation than any other nation on earth—and trends suggest our economic futures are linked,” Mr Eslake said.
“But there is a broad boom in demand for food products expected throughout the region over the coming decades, with opportunities assisted somewhat by trade agreements.
“The agricultural sector has been doing better than the rest of the economy in boosting productivity in recent years, and that needs to continue.”
Ms Schneider also discussed the domestic factors affecting farm performance and trade opportunities.
“On the home front the challenge is increasing productivity to remain competitive in global markets,” Ms Schneider said.
“We’re likely to face more intense competition in global markets from countries such as Brazil and Argentina, which have invested significantly in reducing costs and boosting productivity in their beef and grains industries.”
Karen Schneider, Saul Eslake and Wim Boonstra delivered their addresses at the ABARES Outlook conference being held in Canberra on 1 and 2 March.