Australian exports to China bounce back stronger than ever, but farmers urged to keep diversifying

After previously being hit by unfair trade blocks, Australia is now exporting record amounts to China. But it comes with a warning to farmers.

Australia is selling China more barley and wine than before the products were hit with unfair trade blocks, but farmers have been urged to continue seeking new markets as insurance against any “break down” in relations with Beijing.

In an exclusive interview ahead of the 2024 Bush Summit, Trade Minister Don Farrell said Australia can “walk and chew gum at the same time” by getting products previously subjected to tariffs and other impediments by China back into the country while also continuing to diversify with increased exports elsewhere.

He also revealed the products subjected to barriers are now being exported to China in greater volumes and prices than prior to 2020, helped by the “premium” on sales.

“We’re selling more barley than we were before the ban, stone fruit, wine, same thing,” he said.

In June alone Australia exported $1.76 billion of goods previously impacted by trade barriers to China, including $8.8m in timber logs, $148.m in cotton, $182m in beef and $6.8m in hay.

China's Minister of Commerce Wang Wentao and Premier Li Qiang with Prime Minister Anthony Albanese and Minister for Trade Don Farrell during an agreements signing ceremony at Parliament House this year. Picture: Mick Tsikas/Pool/AFP

Barley exports reached $194.2m for the month, a huge turn around from zero at the same time last year when Beijing’s 80.5 per cent anti-dumping and countervailing duties were still in force.

Wine has made a rapid comeback, with $149.6m worth sold to China in June alone, which was only the second month trade had resumed after China’s Ministry of Commerce finally ended tariffs on Australian products in April this year.

Australian wine is in high demand in China. Picture: Zoe Phillips

The tariffs on wine had been imposed for more than three years at rates as high as 218.4 per cent.

In May about $86m of wine was exported to China.

Mr Farrell said on these early figures Australia was on track to “exceed” the $1.1 billion worth of wine sold annually in the past.

“So I’m not discouraging companies from going back into China,” he said.

“What I do want them to do is to diversify their trade, so that in addition to China, they’ve got other markets, if for any reason, things break down in a particular market.”

Prime Minister Anthony Albanese toured Magill Estate with Don Farrell after China lifted trade barriers on Australian wine. Picture: Brenton Edwards

Mr Farrell said Australian agriculture had a “clean and green image” making food products “much sought after” by Chinese consumers.

“If you come to any supermarket in China, you’ll see large volumes of Australian food and wine now on shelves,” he said.

“But we can well more.

“We can be more ambitious than we are at the moment, not only into China, but into many other countries.”

He said the UK was proving a “boom” for Australian exporters, with beef sales up 500 per cent.

As populations in Asia grow and tastes change, Mr Farrell said Australia was in the “perfect geographic position” to supply the higher quality food and wine increasingly sought after.

He tapped India and the United Arab Emirates as two major growth partners, particularly given Australia’s high food production.

“We’re a country of 27 million people, but we produce food to feed 70 million,” he said.

Australian barley sales to China have bounced back stronger than ever. Picture: Zoe Phillips

Mr Farrell said the government was “very close” to a final agreement on a free trade deal with the UAE, which would be the first deal with a Middle East nation of its kind for Australia.

“That will also unlock $200 billion worth of potential sovereign wealth fund from them to invest in Australia,” he said.

A free-trade agreement with the European Union remains on the table, with Mr Farrell revealing Australia is “happy” to resume talks provided the other side was “serious” about making a good offer.

Negotiations broke down last year after Australia walked away from an proposal deemed unreasonable for Australian farmers in particular, and have since been on hold while European elections take place.

“We’re happy to talk to the Europeans again,” he said.

“But as I’ve said all along, we won’t accept just any deal.

“We need a better offer, particularly on agriculture. In the absence of that, we won’t reach an agreement.”

For regional Australia the opportunities go beyond agriculture, with countries lining up to make deals over the nation’s critical minerals reserves.

“We’re the lucky country again,” Mr Farrell said.

“We’ve got either the most or second most of all the critical minerals in the world.”

Mr Farrell said the next mining boom would be about more than digging up resources, with the government also supporting processing and value-adding onshore where possible.