Surge in Victorian food, fibre exports to China slowed before trade bans

Since Daniel Andrews signed his Belt and Road deal, growth in Victorian food and fibre exports to China has all but dried up.

The extraordinary wave of growth in Chinese demand for Victorian food and fibre had collapsed before the Communist Party cracked down on Australian exports.

New state government data shows the amount of product sent to China by Victorian farmers soared by 42 per cent from 2016 to 2018, reaching $4.58bn.

But between 2018 and the middle of this year, the state’s food and fibre exports to China grew by just 3.7 per cent, even after Daniel Andrews signed his controversial Belt and Road agreement with the Chinese government which the Premier hailed as a way to bolster trade.

While China remains Victoria’s largest food and fibre trade partner, taking a third of our $14.5bn in exports, the value of wine, seafood, animal fibre, prepared foods, forest products and skins and hides sent to China all went backwards last year.

Dave Whyte from Buller Wines in Rutherglen with wine that was supposed to be exported to China. Picture: Simon Dallinger

The figures were released on Tuesday as Scott Morrison urged the Chinese government to come clean on state-run media reports that Australian coal exports would be formally blocked, a move which put the $14bn trade in jeopardy.

“Until we are in a position to have that clarified, then we can only treat these as media speculation,” the Prime Minister said.

“That said, what is important to note here is that if that were the case, then that would obviously be in breach of WTO rules. It would be obviously in breach of our on free trade agreement and so we would hope that is certainly not the case.”

China’s move against coal follows tariffs and restrictions on other Australian exports including wine, beef, barley and forest products.

Premier Daniel Andrews has consistently defended the Belt and Road agreement. Picture: Twitter

The Victorian food and fibre export report, covering the financial year to June 30, showed total exports to China climbed 2 per cent last year — compared to 8 per cent in the US, 5 per cent in Japan, 9 per cent in Malaysia and 13 per cent in Indonesia and South Korea.

It said the barley tariffs had impacted Victorian farmers, but that China’s quick recovery from the coronavirus crisis would “present good opportunities for Victorian exporters”.

“Despite recent trade tensions between China and Australia, demand for Victorian agricultural products remains robust in many sectors,” it said.

The Belt and Road deal, which promises “unimpeded trade” between China and Victoria, is likely to be ripped by next year with new federal government powers.

Mr Andrews has consistently defended the agreement, and recently warned scrapping it would make “a very challenging set of circumstances for farmers, for workers, for businesses, for every Victorian much, much harder”.

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