CANBERRA: A new front in relations with Beijing has been opened by Barnaby Joyce who has extended the live cattle trade to China in a new deal expected to deliver up to $2bn a year to the Australian economy.
The Agriculture Minister today signed the deal to open up the “massive new market” which aims to see Australia delivering a million head per annum to China within the next decade, effectively doubling the size of the current trade. Mr Joyce said that exports could begin within weeks after appropriate safeguards were established.
Volumes of feeder and slaughter cattle would start small but increase over time. “We’ve signed a live cattle deal with China today,” Mr Joyce told The Australian. “This is a massive new market.”
“We would not be able to supply what they want immediately. We will build up to those numbers over eight to ten years. Ultimately, they want around about a million head a year. We couldn’t supply that now.”
“If we get to where we hope this will arrive in maybe a decade, it will be worth more than $1bn a year to Australia … Between $1 and $2bn.” Australia currently supplies about 1.2 million head of slaughter cattle per annum to a range of nations including Indonesia, Egypt, Cambodia, Thailand and Malaysia.
The deal with Beijing is timely, coming after Jakarta shocked the Australian beef industry with an 80 per cent cut to its live export quota this quarter.
Mr Joyce said that over the past five years Australia has nurtured a significant trade in breeder cattle with China, mainly for dairy heifers. “I’m pleased to announce we are a step closer to the commencement in trade in live slaughter and feeder cattle to China,” he said.
The Australian Livestock Exporters Council flagged the historic nature of the agreement, saying that Australia would become the first country to export feeder and slaughter cattle to China.
“Recent market access achievements have contributed significantly to improved farm gate returns for Australian producers while continuing to support over 10,000 jobs across Australia,” said chief executive Alison Penfold.
The deal with China is yet to be signed by Mr Joyce’s counterpart, Minister Zhi Shuping, but he confirmed that negotiations had been continuing for more than 18 months.
“We’ve been diligently working away for a year and a half,” Mr Joyce said. “Hopefully, it shows globally that the protein market is a premium market … Everybody is securing supplies and those people who supply to those markets are going to be in a good space.”
“Superfunds, start asking yourself a serious question: should you be looking at an investment in rural markets.”
