Balaklava business Balco Australia signs $100m deal to supply oaten hay to China

A South Australian-based company has inked a huge export deal as the great trading thaw of China continues to gather pace.

A Balaklava agriculture company has struck a $100m deal to supply oaten hay to China, after the country lifted its two-year ban on renewing Australian trade permits for the industry.

Balco Australia and its Chinese partner Bright Farming signed the deal in Shanghai at this month’s China International Import Expo (CIIE).

Before the ban was imposed, total SA hay exports to China were worth $33 million a year.

The ban was lifted in September and the new deal comes at a crucial time for Balco, which will export about 200,000 tonnes of oaten hay as feed for Bright Farming’s dairy sector over the next decade.

Balco was among 25 Australian hay exporters which had been unable to get their China trade permits renewed since 2021.

China previously accounted for more than 25 per cent of Balco’s total national sales, or 80,000 tonnes a year, of which Bright Farming bought 20,000 tonnes a year.

Balco chief executive Rob Lawson attended China’s dairy expo in July.

“We had all of our previous customers visit us at the expo, saying they want to buy Australian hay again as soon as the market reopens, so that was a really positive sign,” Mr Lawson said.

The deal comes just weeks after Premier Peter Malinauskas’ visit to China, where Mr Lawson was part of the SA delegation and met with industry counterparts including Bright Food Group.

Balco Australia chief executive Rob Lawson said the China deal was “a really positive sign”. Picture: Ben Clark

The state government also supported 21 companies to attend the Australian Pavilion at this year’s CIIE.

Trade Minister Nick Champion said that after record crop yields last season, China lifting impediments could be particularly lucrative for SA farmers.

“Our exporters have had it tough in recent years and this $100m agreement proves how valuable face-to-face conversations are in building business connections,” Mr Champion said.

“I look forward to seeing further improved relations between our two regions.”

Balco is the only Hazard Analysis Critical Control Points (HACCP) accredited hay export company in Australia, and undertakes rigorous quality and nutritional testing.

Its oaten hay product will be used as a prime source of digestible fibre in China’s agricultural sector.

Australia is highly regarded for farming practices that result in a “green and clean” reputation with low nitrate soils, low potassium levels and which do not use GMOs.

Originally published as Balaklava business Balco Australia signs $100m deal to supply oaten hay to China