Related News

Agri trade platform raises US$3mn in funding round

Rabobank rebuilds trade and commodity finance agri team

Fewer overdue payments but longer delays for Asia’s corporates as credit terms tighten

UK food and drink industry hopeful Australia, New Zealand trade deals will reverse drop in exports

Citi announces treasury and trade solutions promotions in Apac

Queensland’s cattle industry is set to benefit from China’s Maritime Silk Road project, as the state looks to consolidate its post-mineral boom economy.

This week, Chinese figures arrived in the state to negotiate boosting maritime trade links increasing the export of cattle and other livestock and agricultural produce to China’s most populous province of Guangdong.

The commodities super-cycle has gone into decline over the past couple of years, leaving resource-rich Queensland facing widespread job losses and decline in export values.

However, trade figures in Brisbane have voiced hope that the agriculture sector might be able to fill some of the void left by coal and metals, which are experiencing severe difficulties. Involvement in China’s ambitious Silk Road project, which is set to boost transport and logistical links across Asia Pacific, the Middle East and Europe, would certainly increase the potential for that.

Meetings in two Northern Queensland towns – Townsville and Charters Towers – this week seemed to accelerate the possibility, with a number of memorandums being signed to boost trade.

A government figure tells GTR that agriculture is one of the areas in which Queensland can hope to excel in the coming years, noting that the region is one of the few advanced tropical agriculture hubs in the world.

“Grab a map of the world and these advanced tropical places are few and far between,” says the chair of one of Australia’s premier export support bodies, who wishes to remain anonymous. “Queensland needs to look at what it can do with technology and advancement. Some areas we could become a net exporter in are vertically integrated beef supply chains, large-scale citrus and vegetable operations, large integrated agricultural projects and a range of early stage bio-energy projects.”

Chinese investors are already looking to Queensland’s agri-sector as a destination for their capital. In September, the Beijing Australia Agricultural Resource Co-operative Development Fund – a joint venture between two Chinese investment companies – was established to plunge some A$3bn into Australia’s agriculture sector. The fund will focus on exporting infant milk formula, beef, lamb and seafood to China.

Given that meat totals 10% of Queensland’s annual export (A$4.3bn) this investment can be expected to prove favourable to the Sunshine State.

Industry figures have warned, however, that those hoping to invest in the local agriculture sector would be well advised to partner with local players.

“The agriculture sector, like the minerals sector, is cyclical and we feel that this cycle is now turning,” Cameron MacMillan, executive director of export consultant BDO tells GTR. “There’s a long tradition in Queensland – it’s part of local life, this background in agriculture. I think to be able to work in agriculture here you need local partners that understand this agriculture cycle.”

The China-Australia Free Trade Agreement (ChAFTA) is expected to accelerate China’s investment in the sector.

Meanwhile Australian investors are also looking at ways of boosting the presence of the country’s agri-goods in China: In November, it was reported that Gina Rinehart, the country’s richest person and the woman behind the vast Hancock Prospecting mining empire, was looking to invest up to A$500m in a milk formula processing plant in South Queensland.