Rural Bank report reveals new record for Australian agricultural exports

Agricultural exports have hit a record high, led by demand from China which continues to surge amid an easing of trade tensions.

A surge in cotton exports helped to lift Australian agricultural exports in 2022-23.

Agricultural exports reached a record high in 2022-23, according to new figures, which reveal Chinese demand for Australian commodities continues to surge amid an easing of trade tensions with the nation’s largest trading partner.

Rural Bank’s annual agricultural exports report found a strong 2022 winter crop helped to boost the value of agricultural exports to $79.9bn, up 18 per cent from the previous year and the third consecutive year of growth.

Australia’s top 13 export markets all recorded year-on-year growth, with the top 12 all hitting record highs.

Exports to China rose almost 23 per cent to $16.6bn, led by a 66 per cent increase in wheat exports, and growth in sales of beef, almonds and cotton.

While China still makes up more than 20 per cent of the value of Australia’s total agricultural exports, that figure remains well below the 30 per cent it represented before the introduction of sanctions in recent years.

Japan and the US retained their positions as Australia’s second and third most valuable agricultural export markets in 2022-23, recording annual growth rates of 4.6 per cent and 8.7 per cent.

Record production and prices lifted cropping exports by 29.6 per cent to $31bn. It remains the most lucrative segment ahead of the cattle sector which grew 5.9 per cent to $13.1bn.

Cotton was the big mover, with exports more than doubling to $4.9bn.

Rural Bank head of agribusiness development Andrew Smith said that while 2022-23 set new records for many export markets, it was likely to be followed by falls in 2023-24 due to less favourable winter cropping conditions.

“Growth in export value was primarily driven by rises in the value of broadacre crops and cotton, with consecutive years of record-setting crops and high commodity prices driving the extraordinary level of export value seen in 2022-23,” he said.

“The value of Australian agricultural exports in 2023-24 is forecast to fall below the records set in the past two years but will still be the third most valuable year on record.

“The anticipated decline will be primarily due to a reduction in crop area planted and yield, with current estimates suggesting a 34 per cent decline in winter crop production compared to last season.”

The total export value in 2022-23 was almost 50 per cent above the five-year average, and was supported by a lower Australian dollar, which sustained demand despite the challenging economic conditions globally.

But with forecasts for a smaller crop in 2023 and lower prices for most commodities, export values are expected to return closer to average in the current fiscal year.

Prices for wool, dairy and livestock products including red meat have also declined in recent months, and are not expected to improve in the near-term.

Wheat remains a bright spot however, with demand from Asian countries including Vietnam, South Korea, Indonesia and Thailand helping to lift exports in the region by more than $1bn in 2022-23.

Beef exports are expected to rise in 2023-24 due to production growth and strong international demand, particularly from the US.

On a state-by-state basis, states with large cropping industries benefited most in 2022-23, with Western Australian exports up 33 per cent (to $16.2bn), exports from South Australia up 19 per cent (to $8.9bn) and exports from Queensland 18 per cent higher (at $12.5bn).

However Victoria retained its position as Australia’s largest agricultural exporter, with cropping, horticulture and beef increases boosting exports from the state by 7.7 per cent to a record high $18.7bn.

Tasmania and the Northern Territory were the only regions to report declines in overall export values in 2022-23.

“In Tasmania, dairy exports declined but this was offset by the export value of seafood which increased by $44.6m,” Mr Smith said.

“The Northern Territory saw an export value decline of 5 per cent, driven lower by a 13.5 per cent reduction in cattle export value which accounts for 95 per cent of NT exports.”