Australian agribusinesses are beginning to realise the advantages of our geographical proximity to Asia and the tremendous economic benefits it will bring.
Although a number of larger agribusinesses have been active in Asia for years, the next stage of the relationship calls for greater engagement from the small and medium-sized enterprise community.
As Australia’s largest Agribusiness Bank, NAB takes this role seriously. That’s why we have established a specialist Agribusiness Asia Desk to help initiate and strengthen trading ties for Australian agribusiness in Asia.
Our Agribusiness Asia Desk works specifically to help Australian farmers make the most of the rapid growth in demand for high quality produce in Asia.
For example, our expert bankers assist local clients connect with Asia for export activities via business to business channels and also help new investors invest in the agribusiness sector with banking and finance solutions.
To date, we’ve assisted wine exporters, milk processors, cheese manufacturers and meat processors realise strong export opportunities in Asia, just to name a few.
The fundamentals are there: Australian farm exports are already forecast to reach $39.3 billion by 2018/19, up 11 per cent on the average over the last five years according to ABARES. Over the same period, gross farm production will reach $57.5 billion.
However even this immense growth will meet just a fraction of the demand coming from Asia, and in particular, China. By 2050, Asian agrifood demand is set to double to US $3.1 trillion.
While it is unrealistic to think Australia alone will be the sole supplier and beneficiary to this extraordinary growth, our farmers’ strong environmental credentials and reputation for providing high quality, safe produce means we are perfectly positioned to take advantage of the demands of the rapidly growing middle class in Asia.
Growth in the Asian middle class is set to explode in coming decades – from 500 million people today to 3.2 billion people by 2030.
And as wealth and income levels rise, the focus will shift from a produce quantity to quality basis, with safe and nutritious food taking priority. Consumption patterns will change, and demand for high quality meat, dairy, eggs, sugar and wine – which Australia is perfectly positioned to supply – will increase.
This opportunity has been recognised by Canberra, with the Federal Government securing a free trade agreement with South Korea and Japan, and continuing to work towards a free trade agreement with China.
NAB firmly believes strengthening trading ties with Asia is good news for the Australian agriculture industry; it’s an exciting time for producers and agribusinesses and one they should be looking to seize with both hands.
By Roger Gaudion, Head of NAB Agribusiness Asia Desk
