Global Food Forum: Keep a diverse export base, says Elders boss

Mark Allison says producers should consider developing new markets in the region to counter the potential threat from further trade disputes with Beijing.

Mark Allison, CEO, Elders at the Global Food Forum. Picture: Adam Taylor

Elders chief executive Mark Allison has cautioned Australian agricultural producers to diversify their customer base away from an focus on China in the wake of rising international trade tensions, although the rural services group had to date not experienced any disruptions of its beef sales to the country.

Mr Allison, speaking to The Australian’s Global Food Forum on Thursday, has also waded into the heated debate over water rights in Australia to argue that if there was evidence traders were causing distortions in the water market there should be government intervention.

Shares in Elders, a 180-year-old diverse rural group that supplies auctions, feed, chemicals as well as marketing and financial services, are trading at record highs and Mr Allison provided an upbeat outlook for the rural sector at the Global Food Forum with recent good rains generating attractive conditions for crops.

Turning to the increasingly souring trade relationship with China, Mr Allison said producers should consider developing new markets in the region and elsewhere in the world to counter the potential threat from further trade disputes with Beijing.

“I really do think the answer is to have diversified markets and as is now we not totally reliant on China for many of our exports … I think we must ensure that we have multiple alternative markets”.

“There will be disruption in global supply and demand … but this is the global market,m it is where we operate, we have opted to not subside our agriculture and to compete on our quality, traceability and our great supply chains and we should focus on what we can control.’’

Recently China has placed tariffs on Australian barley, refused beef from some abattoirs and is now investigating possible anti-dumping allegations against Australia’s export of wine to the country.

Mr Allison said Elders relationship with its Chinese customers had remained positive despite these trade and political tensions.

“The relationships in this case with our Chinese customers have remained very positive and so while geo-political things have been happening, the personal relationships and business relationships have remained positive.

“And I think the federal government is doing what a good federal government does and that is protect our sovereignty and ensure that the people in the trade are protected.’’

On the contentious issue of water rights and in particular speculative investors trading in water for profit rather than use the resource to water crops and feed herds, Mr Allison said there should be intervention if there is disruption in the market.

“I think if is hardcore action in that area clearly it runs to the detriment of what the objective is, and the objective is to ensure that we have enough water for our environmental flows, we have enough water for our agriculture and for our communities. And I think if there is distorting activity, and is actually what is happening, clearly there needs to be intervention in that area.”

Mr Allison said the farming sector had a much more positive attitude at the moment despite COVID-19, tensions with China and the recession.

“I think so, I think around Australia, and I said earlier it would only be in the wool industry where there is, I wouldn’t say pessimism, but we are just resigned in the wool industry to the pricing and demand”.

“But I think there’s every reason to be optimistic, it looks like the next 18 months to 2 years will seasonally be quite positive.”