Recent trade sanctions placed on Australian goods by our largest trading partner China is likely lead to billion-dollar losses in our export industries.
There have been calls for industries to diversify export markets in order to support the nation’s long-term economic growth and stability.
The reliance on China becomes clear as we see revenue export revenue from China overshadows our other major export partners including Japan and South Korea.
While China will likely remain a key trading partner, we should not overlook the potential for our exports to succeed in other markets.
Wine – Who Says the World only drinks French wine?
Rapidly developing countries like South East Asia have experienced an increasing trend in alcohol consumption.
New world wines are becoming more understood and accepted by locals and the region is seeing a growing number of expatriates and affluent middle-class citizens.
Southeast Asia’s emerging wine market present opportunities for Australia
Australia and South East Asia’s geographic proximity and the ASEAN Free Trade Agreement offers cost benefits over international competitors. In Thailand for instance, Australian wine is regarded as a high value for money product while similarly in Malaysia, the consumption of wine is seen as a more affordable and healthier alternative compared to spirits.
The region’s booming tourism industry also allows exporters to explore unique distribution channels such as airlines, hoteliers and restaurateurs.
Australian wine could do really well in Europe
Amongst Australia’s top ten importers of wine in 2020, demand by European countries has risen by an exceedingly large margin compared to the US and China.
We can see here that a mature market does not necessarily mean it is impenetrable.
Australian wine has the potential to bring a unique and fresh offering to the European market which has an existing high level of demand and market knowledge.
Education – Are we being too complacent?
For many years Australia has relied largely on the Chinese market as a source of its international student revenue.
In recent years China has been working on strengthening the quality and capacity of its education systems, hence improving its attractiveness for local and international students.
This means Australia will likely face increased competitive pressures in retaining its key onshore Chinese market.
An example of one country that has taken action to diversify its education market includes one of our biggest competitors – Canada. It announced a plan to commit CDN $148 million to improving global student mobility – with a focus on encouraging students from non-traditional countries such as Mexico and Brazil to enrol.
If one of our biggest competitors is setting its sights on new markets, the question remains – why aren’t we?
Forecasts reveal that the 15-29 population of Nigeria, Pakistan and the Philippines are set to collectively increase by 29 million, which is marginally larger than traditional markets of Education such as China and India. This age group is considered a key determinant of future industry demand.
Barley- A diverse product perfect for a diverse market
A report on Australian Export Grains Innovation Centre (AEGIC) detailing global trends in barley consumption, highlighted the need for Australian exporters to grow its presence outside of China and anticipate the diverse needs of various markets.
For instance, the Japanese market is also seeing a trend of increasing health-consciousness – allowing Australia to take advantage of the growing interest in barley beta-glucan – a product known for its health benefits.
Saudi Arabia which is currently the largest importer of barley could also be a target for Australian barley producers.
Earlier this year Saudi Arabia announced a tender to purchase 730,000 tonnes of Australian barley – an interest sparked by the dramatic drop of Australian barley prices since the imposition of Chinese tariffs.
This presents opportunities for Australia to establish a strong trade relationship with the world’s largest importer of barley.
Elsewhere, promising markets like India, Vietnam and Indonesia are seeing a rising demand for premium beer.
Lessons for 2021 onwards
With a looming pandemic, tariffs and half the globe in an economic recession, this year Australia’s export market will be tested like no other. Perhaps one lesson we can all learn from this all is that we need to be proactive in diversifying our export market with less traditional partners
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