Ruqayyah Snyder
Australia's expansive arable land supports large-scale farming activities, including some of the world's largest beef ranches and wheat and barley fields. Agriculture is a pillar of the Australian economy, with around two-thirds of total production exported. In the 2022-23 financial year, Australia exported a record $80.4 billion in agriculture, fisheries, and forestry products. China is Australia's largest single export market, worth approximately $17 billion in 2022-23. Other top export destinations include the United States, Japan, Indonesia, and the United Kingdom.
| Characteristics | Values |
|---|---|
| Top partner countries for food exports | New Zealand, China, the United States, the United Kingdom, and Japan |
| Top agricultural exports | Wool, animal hair, goat meat, beef, wheat, barley, opium, potatoes, cotton, sugar, wine, sheep meat, dairy, and barley |
| Top export markets | China, the United States, Japan, Indonesia, and South Korea |
| Value of exports in 2022-23 | $80.4 billion |
| Change in export value from the previous year | +17% |
| Australia's largest single export market | China ($17 billion) |
| Fast-growing export markets | Association of Southeast Asian Nations (ASEAN) ($19 billion) |
| Increase in wheat exports to Indonesia | +63% |
| Increase in cotton exports to Indonesia | +12% |
| Increase in beef and veal meat exports | +33% |
| Increase in sheep and goat meat exports to South Korea | +49% |
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What You'll Learn
China is Australia's largest single export market
Australia exports food products to a number of countries, including China, New Zealand, the United States, the United Kingdom, and Japan. China is Australia's largest single export market, and in 2020, it was Australia's largest two-way trading partner, accounting for almost a third of Australia's exports. China is the largest market for Australian agricultural exports, worth $17.1 billion and accounting for around a quarter of total agricultural exports in 2023-24.
China's consumers can celebrate the Lunar New Year with Australian cuisine, including lobsters, wine, and beef steaks. In 2024, exports to China of Australian agricultural products rebounded, and China remains the largest market for these exports. Australia has a reputation as a supplier of high-quality agricultural products in China, and the country is an important source of foreign investment in Australia, leading to greater infrastructure, productivity, and job creation.
The election of the Albanese Labor government in May 2022 improved the relationship between the two countries, and China's share of Australia's exports started climbing again in early 2023, reaching 36.7% by February of that year. This was due in part to the removal of trade impediments, with over 900 tonnes of live rock lobsters exported to China since the removal of restrictions.
China's position as Australia's largest single export market is further emphasized when compared to other nations. For example, Japan's share of Australian exports dropped from 20% to 14.4% in the 12 months to April 2024, while South Korea's share fell to 7.0% and Taiwan's to 3.5%. In contrast, sales to China surged 17.5% last year to surpass $200 billion for the first time.
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The US is a top consumer of Australian agricultural products
Australia is a major agricultural producer and exporter, with over 421,000 people employed in the industry as of 2023. The country's farm gate output was $100 billion a year for a 5.7% share of GDP in 2023, injecting $155 billion into the GDP and accounting for 12% of the nation's total GDP. The US is a top consumer of Australian agricultural products, along with China and Japan. In 2009, the total products traded between China and Australia were valued at AUD$85.1 billion, a figure that has been increasing since.
Australia's agricultural success is due to its policies of long-term visions and promotion of agricultural reforms, which have greatly increased the country's agricultural industry. The country has a diverse agricultural sector, producing a range of crop and livestock products. Three successive years of record-breaking production value from 2020-21 to 2022-23 were underpinned by extremely favourable climate conditions and strong commodity prices across agricultural products. Despite declining in 2023-24 due to drier conditions and lower crop prices, agricultural production was still the third highest on record and is forecast to continue thriving.
Australia's agricultural activity is determined by climate, water availability, soil type, and proximity to markets. Livestock grazing occurs in most areas of the country, while cropping and horticulture are generally concentrated in areas relatively close to the coast. The country has three main agricultural zones: the high rainfall zone of Tasmania and a narrow coastal zone (used mainly for dairying and beef production); the wheat and sheep zone (cropping and the grazing of sheep and beef cattle); and the pastoral zone (characterised by low rainfall, less fertile soils, and large-scale pastoral activities involving the grazing of beef cattle and sheep).
Australia's agricultural productivity benefits from its investment in research and development, with total R&D funding in 2023-24 amounting to $2.98 billion. This allows for the adoption of new farming methods and technologies, such as sustainable land practices that have become standard for Australian farmers. These practices include stubble retention, minimised tillage, and optimised use of pesticides or fertilisers.
The US, as a top consumer of Australian agricultural products, contributes significantly to the demand for these sustainable practices and supports the country's agricultural growth. The US market provides opportunities for Australian producers to showcase their world-standard agricultural practices and high-quality products. This demand for Australian agricultural products in the US highlights the strong trade relationship between the two countries and the recognition of Australia's agricultural capabilities.
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Japan is a key market for Australian exports
Australia exports food products to several countries, including New Zealand, China, the United States, the United Kingdom, and Japan. Japan is a key market for Australian exports, and the two countries share a deep and multifaceted economic relationship. Japan is the world's third-largest economy and Australia's second-largest source of foreign investment. The total bilateral trade in services between the two countries was valued at AUD6.6 billion in 2023, with exports valued at AUD2.9 billion. Australia's key services exports to Japan include travel, transport, business, and insurance/pension services. Japan's large, relatively affluent population also makes it one of the world's largest consumer markets.
The Japan-Australia Economic Partnership Agreement (JAEPA), which came into force in 2015, has significantly improved market access for Australian exporters in goods and services and enhanced investment protections. The agreement has streamlined the certification process for Australian goods exported to Japan, ensuring compliance with JAEPA and making it easier for Australian companies to grow their businesses in Japan.
Japan's diverse marketplace offers a variety of opportunities for Australian exporters. Japanese importers and consumers value high-quality products and services and rely on Australia for goods such as food, energy, and minerals. Australia's major exports to Japan have traditionally been natural resources, including gas, coal, iron ore, copper, and aluminium, which address Japan's diverse industrial needs.
The strong economic partnership between Australia and Japan is further reflected in the significant flow of investment. By 2021, the stock of Australian investment in Japan was valued at A$112 billion. Additionally, Japan is a significant source of foreign investment in Australia, ranking as the country's third-largest trading partner. Both countries are united by shared values, including a commitment to democracy, human rights, free trade, and a rules-based international order.
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Indonesia's economic development supported by Australian exports
Indonesia and Australia have a strong economic partnership, with Indonesia being Australia's 14th largest trading partner. In 2021-22, two-way trade between the two countries was valued at A$18.35 billion. Australia exports a variety of goods to Indonesia, including wheat, beef and cattle, petroleum, aluminium, and cotton. Indonesia is also one of Australia's largest markets for coal, crude petroleum, wheat, and live animals.
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) serves as a framework for the two countries to strengthen their economic cooperation and unlock the potential of their bilateral economic partnership. Under IA-CEPA, 99% of Australian goods will enter Indonesia duty-free or under improved preferential arrangements. This agreement also includes the Skills Development Exchange Pilot, which allows businesses from both countries to send employees to undertake workplace placements in the other country for up to twelve months. This initiative not only enhances workplace skills but also strengthens cooperation and mutual understanding between Australia and Indonesia.
Australia is committed to supporting Indonesia's economic development through various means. Firstly, Australia is the fourth-largest donor of foreign aid to Indonesia, with a history of providing development aid dating back to 1953 through the country's participation in the Colombo Plan. Secondly, Australia has invested in Indonesia's education sector, with more than 15,000 Indonesian students enrolled in Australian schools and universities, contributing $500 million to the Australian economy.
Additionally, Australia has worked to improve market access and investment in Indonesia, reduce trade barriers, and increase the competitiveness of Indonesian exports globally. This includes the elimination of tariff posts and the improvement of value chains between the two countries. By some estimates, Indonesia is projected to become the world's fifth-largest economy by 2030, and Australia's support and cooperation ensure that it is well-positioned to benefit from and contribute to Indonesia's growth.
In terms of food exports, Australia's top partner countries in 2022 included New Zealand, China, the United States, the United Kingdom, and Japan. However, Indonesia remains a significant market for Australian food products, particularly in the meat and livestock industry. Australia exports approximately 700,000 cattle each year, with Indonesia being the primary recipient. This trade is vital to meeting the high demand for meat in Indonesia due to its growing economy.
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Australia exports meat, dairy and wool to South Korea tariff-free
Australia's top food export partners include New Zealand, China, the United States, the United Kingdom, and Japan. In 2022, Australia's food exports to these countries accounted for a significant portion of its total exports.
In recent years, Australia has also been expanding its food exports to South Korea. The Korea-Australia Free Trade Agreement (KAFTA) has played a crucial role in enhancing this trade relationship. Under KAFTA, Korea has eliminated or significantly reduced tariffs on a range of Australian agricultural products.
One of the key benefits of KAFTA for Australia is tariff-free access for meat, dairy, and wool exports to South Korea. Australia's meat exports to Korea, including sheep and goat meat, have been progressively becoming duty-free. By 1 January 2023, Korea will have eliminated its 22.5% tariff on these products. Additionally, tariffs on key pork exports, ranging from 22.5% to 25%, are being phased out gradually between 2018 and 2028.
In the dairy sector, KAFTA has led to significant tariff reductions. Cheese, one of Australia's main dairy exports to Korea, enjoys liberalized trade. A duty-free quota for cheese was set at 5,865 tonnes in 2022 and will continue to grow by 3% annually. Tariffs on other dairy products, such as milk, cream, ice cream, yoghurt, and whey, are also being progressively eliminated, with a complete elimination by 1 January 2033.
Australia's exports of wool to Korea have also benefited from KAFTA. While specific data on wool exports is limited, the agreement's overall tariff reductions and the duty-free access for 83% of Australian exports to Korea in 2015 have undoubtedly had a positive impact on the wool trade.
Through KAFTA, Australia has successfully diversified its food export markets and strengthened its trade relationship with South Korea. The agreement has created a more favourable environment for Australian exporters, opening up new opportunities and enhancing the competitiveness of their products in the South Korean market.
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Frequently asked questions
Australia exports food products to many countries, with its top five export partners being New Zealand, China, the United States, the United Kingdom, and Japan.
Australia exports a variety of agricultural products, including wheat, barley, wool, goat meat, beef, and various fruits and vegetables.
China is Australia's largest single export market, with exports worth approximately $17 billion in the 2022-23 financial year.
Australia is one of the few legal exporters of opium for the pharmaceutical industry, and it is also the world's largest exporter of goat meat.
Australia has been a strong advocate for free and fair agricultural trade within the WTO and the Cairns Group. Through negotiations and progressive trade policy reforms, Australia has improved access to lucrative markets and reduced tariffs for its exporters.
