There have been ongoing concerns that the US President’s trade deal with China could hurt Australian farmers and exporters.
In the past few weeks, China has suspended the import of beef supplied by four Australian abattoirs and imposed crippling tariffs of about 80% on Australian barley imports.
China is an important market for Australian products including wool, cotton and dairy. Australia’s two-thirds of farm production is being exported, of which, one third is to China alone. The Country exports 49% of its barley and 18% of the beef production.
Earlier this year, in January, China had agreed to buy an extra $200 bn of American farm products over two years as part of an agreement between them.
Just when Australian barley exporters were trying to stop the imposition of new tariffs, China announced that it would immediately allow barley imports from the US.
China has also passed a string of new regulations on Australian imports. With China’s new ore regulations looming large what could be anticipated by Australian exporters as Australia has lucrative minerals export trade going with China.
It has also been in the news that the Chinese government is asking state-owned power utilities not to buy new cargoes of Australian thermal coal and rather to buy domestic coal instead.
However, in some cases, both the Government and the mining industry were of the view that the new regulations were likely to actually help Australian exporters by streamlining the import process.
Similarly, the decision about coal imports could have been aimed at helping China’s domestic coal miners. China has since long been our customer. They know and value the quality of our coal and our iron ore. For their steel mills and other energy needs, what could be better than our well known and well-evaluated products.
Australia has a two-way relationship with China. China needs Australia as much as Australia needs China.
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.