SA exports to China hit a record high in 2020, despite sharp drop at end of year amid wine tax

China throttled South Australian exports late last year – but up until that point, they had hit a record high.

South Australia’s exports to China soared to a record $3.47 billion in 2020 despite the country targeting Australian wine, seafood, timber and barley.

SA’s exports to China were 22 per cent higher than the previous year, 44 per cent higher than in 2015 and more than double what they were a decade ago.

But the state’s exports to the United States tumbled to their lowest point since 1999, declining for the sixth consecutive year to $891m.

SA’s exports to Britain, India, Thailand and Indonesia increased despite the pandemic - and more than doubled on 2018 levels to Canada to hit $618 million.

The state’s exports fell slightly to key markets like Japan, South Korea and Malaysia.

Business SA chief executive Martin Haese welcomed the figures, particularly after China slapped import taxes of up to 212 per cent on Australian wine in November.

Business SA’s Martin Haese said it was great to see SA growth in other key markets. Picture: Kelly Barnes

“With the uncertainty of tariff changes and trade relations with China impacting South Australia’s wine exports acutely, it is pleasing to see broader export growth into other markets such as India, Indonesia, Thailand, Canada and the UK, each highlighting the diversity of SA’s export opportunities,” Mr Haese said.

“Governments at both levels need to bear in mind that goods exporters will need more support over the coming 12 months, making up for significant losses in services exports, primarily international tourism and student spending in SA,” he said.

State Trade Minister Stephen Patterson said last year was difficult for exporters so it was encouraging to see goods exports for SA up 2.3 per cent over the year to December.

“We know there’s much more work to do which is why the Marshall Government is building our export capability and resilienceby developing new grant programs and opening overseas trade offices in key markets like the US, Japan and the Middle Eastto expand market opportunities,” he said.

The US was SA’s second largest market and the State Government was confident it could grow further through sector-based plansand new trade offices opening in Houston and New York, he said.

The UK was also an important market and “one that offers growth opportunities for services exports along with a key sourceof foreign direct investment”.

Australia’s wine exports to China fell by 14 per cent to $1.01 billion for 2020, after a spike in August to October and then a sharp drop in November and December.

Winemakers were now targeting other South East Asian markets, including Vietnam, Malaysia and Thailand, Australian Grape & Wine chief executive Tony Battaglene said.

Britain, the US, Canada, Europe and East Africa would also be targeted, with the lucrative Chinese market tipped to be virtually closed to Australia for up to five years.

Mr Battaglene said the UK was a “major opportunity” following Brexit and with Australia currently negotiating a free trade deal with the country.

“I think longer-term and medium-term we will be looking to open up India,” Mr Battaglene said, but added it would be “incredibly hard” market to crack given the complex bureaucracy, high tariffs and a number of “dry” states.

The US would also be tough to crack but had the biggest potential, he said.

Winemakers were also hoping to claw back some of the Australian market from New Zealand importers, particularly as wine drinkers were “moving away from Sav Blanc”.

Chardonnay and Pino Gris were becoming more popular again and “South Australia has got some crackers”, Mr Battaglene said.