Australian agriculture could be spared coronavirus blow

It’s been a tough few months for Australian agriculture in the face of coronavirus. But a recent report shines a positive light on the industry post-pandemic.

Agricultural commodities closely linked with the food service industry and airfreight were most acutely affected by recent COVID-19 disruption. Picture: File

AGRICULTURAL commodities closely linked with the food service industry and airfreight were most acutely affected by recent COVID-19 disruptions.

And markets have experienced demand-driven falls in prices instead of being affected by drought or natural disaster for the first time in recent years.

That’s according to the latest Australian Bureau of Agricultural and Resource Economics and Sciences report, released this morning, that looked at the relationship between Australian agricultural trade and the global coronavirus outbreak.

According to the report, with people living in lockdown conditions or living on reduced incomes cut back on discretionary spending, some consumer products will be affected.

But despite the disruption of social distancing regulations and closure of food service industries, Australian agricultural exports were strong in recent months.

ABARES head of forecasting and trade Jared Greenville said Australia was positioned to take advantage of opportunities on the global market post-pandemic.

“We saw government and industry respond to labour challenges, through, for example, visa extensions and permission for agricultural workers to stay with one employer for a longer period,” Dr Greenville said.

“Supply chain and logistics disruptions observed in the early stages of the pandemic are benefiting from government and industry responses, and despite the risks, overall export performance has remained strong.”

While the pandemic precipitated a worldwide economic downturn, demand for essential food products could be spared, similar to when the Global Financial Crisis struck.

“As economic activity declines and global incomes are reduced, products consumed through more discretionary spending have been more significantly affected … these include high quality foods for cafes and restaurants,” Dr Greenville said.

“These effects were seen for seafood where the outbreak in China has been estimated to have led to a fall in export earnings of around $200 million in 2019–20.”

Dr Greenville said seafood exports declined in February, before rebounding slightly in March.

“Live animal exports are a watch point as the pandemic evolves, as demand from Indonesia and Vietnam declines, but export values remain above the five-year average,” Dr Greenville said.

The report showed products that feed into manufacturing supply chains, such as wool and cotton, will be influenced by how long manufacturing businesses and factories are closed or disrupted during COVID-19 shutdowns.