Australian exporters urged to 'spread their risk' as China trade tensions continue

The federal government is looking into reports that sweeping bans are set to be imposed on some $6 billion worth of Australian exports to China.

Australian Agriculture Minister David Littleproud speaks during a press conference at Parliament House in Canberra, Wednesday, August 26, 2020. (AAP Image/Lukas Coch) NO ARCHIVING

Australian Agriculture Minister David Littleproud Source: AAP

Exporters are being urged to "spread their risk" in case China officially suspends imports of various Australian products.

Chinese authorities are reportedly planning to halt imports of Australian wine, lobsters, sugar, coal, copper, barley and timber.

News that China is blocking the products, collectively worth around $6 billion, came from state-run newspaper The Global Times.

Another state media outlet, the China Daily, warned Australia would "pay tremendously" if it continued antagonising China.

"China is Australia's largest trade partner and all of the investigations so far only cover a small part of the imports from Australia," its editorial said.

"If Canberra continues to go out of its way to be inimical to China, its choosing sides will be a decision Australia will come to regret as its economy will only suffer further pain."

Individual sectors have been informally advised of the trade strikes but there has been no formal announcement from the Chinese government.

Agriculture Minister David Littleproud is seeking clarification from Beijing. In the meantime, he is encouraging exporters to consider sending goods to other markets.

"We are saying to our exporters, you should spread your risk," Mr Littleproud told 4BC radio.

The minister also had a warning for China.

"If you want to play by the rules, everyone will play nicely," he said.

"But if you don't, then obviously there's a greater risk, even for our exporters, and they need to take that into account if they're going to send product there, and they may ask for a higher price for that commodity."

Labor accused the Morrison government of failing to deliver leadership, arguing hardworking Australians were paying the price.

Deputy opposition leader Richard Marles described the diplomatic relationship as completely hopeless.

"It is no good to point over at China or indeed any other country and say it's not our fault," he said.

"We're seven years down the path of this government and there's not a single personal relationship of substance that exists between anybody in this government and anyone in the Chinese government."

Mr Marles said Australian workers with jobs on the line were looking to government for answers and action.

"There are obviously difficulties and complexities in the relationship with China, which is exactly why you need personal relationships to add balance to the situation," he said. "But right now, they can't speak to a single person in China."

Mr Dutton rejected the criticism as "the cheap talk of opposition".

"The cheap seats in opposition can fire all these shots but the reality is China is a sovereign state, it makes decisions," he said.

"Shouting out across the television screen at China is not going to work. We'll work with them behind the scenes and we'll continue that discussion."

Senior ministers have cautioned against concluding the trade strikes are in response to positions Australia has taken in relation to China.

Diplomatic relations are heavily strained due to disputes over the coronavirus, Hong Kong and the South China Sea.

NSW barley farmers look to harvest

Meanwhile, farmers harvesting bumper crops of barley in western New South Wales are getting on with the job.

Tony Quigley is a farmer at Trangie, west of Dubbo.

Thinking on his feet, Mr Quigley quickly stopped sowing barley in May when China announced it would introduce an 80 per cent tariff on Australian exports and put wheat in instead.

“When the news of the tariff on Australian barley came out we just simply planted more wheat and reduced the barley area,” he told SBS News.

Tony Quigley at his farm at Trangie, west of Dubbo.
Tony Quigley at his farm at Trangie, west of Dubbo. Source: SBS

The barley price dropped when the tariffs were introduced, leaving many farmers nervous they would not make a profit when it came to harvest.

But the price has now rebounded to about $200 a tonne, which farmers say is not too bad of a price. Demand for the product domestically is high, with many silos empty after three years of drought.

Tim Roberts, who lives just down the road from Mr Quigley, says his barley was already in the ground when the tariffs were introduced.

“Yeah it’s not positive, but it's not the end of the world either,” he said.

“The price has rebounded significantly to at or slightly above what it was at sowing time anyway, so the numbers people were budgeting on will still be there or thereabout.”

David McKeon, the CEO of grain farming body Grain Growers, is urging the government to work on opening up new export markets.

He said the coronavirus pandemic has had a big impact on many grain farmers' bottom line.

“Missing out on being able to capture those top returns for farmers in a year like this year, that is a big impact for farmers,” he said

“There is a need to accelerate some of that work at the moment. We have seen some work from government, but we actually need more work in that market development area.”

Tony Quiqley with his barley crop
Tony Quiqley with his barley crop Source: SBS

Mr Quigley said he would like to see Australia’s trade relationship with China continue unimpeded.

“I would just urge the government to keep building those ties and those trade ties,” he said.

“They've got a lot of people and we've got a lot of produce, and it is a pretty good fit … so it would be a pity to see that relationship deteriorate.”

Additional reporting by Lucy Murray.

5 min read
Published 6 November 2020 at 5:57pm
Source: AAP,SBS