Australia / Coronavirus Insights
Industry Exposure Tool Provides Insights Amid China Dispute

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by IBISWorld
May 13 2020

Deteriorating relations between China and Australia represent a growing threat to a range of Australian industries, amid the backdrop of ongoing disruption due to the COVID-19 pandemic. China has threatened tariffs of over 80% on imports of from Australian barley farmers in the Grain Growing industry, following the Chinese Government’s accusations that Australia has dumped cheap barley into China. China has also banned the import of meat products from some firms in the Meat Processing industry.

Other industries that could be disrupted by Chinese trade restrictions include Iron Ore Mining, Black Coal Mining,  and Milk and Cream Processing. Amid volatile economic conditions, IBISWorld’s Industry Exposure Tool can provide vital information to firms navigating through uncertain times. This exposure analysis tool will help you detect potential points of exposure to Chinese trade that will inform your future business strategies. Our top-level analysis measures exposure to disruptions already caused by the COVID-19 outbreak, along with areas of interest for potential further research.

Click here to access the Industry Exposure Tool

Australia is a significant grower and exporter of barley, with barley accounting for approximately one-third of local grain production and China accounting for an estimated 13% of total grain exports. China imports a substantial amount of barley to make beer and feed livestock. The new tariffs would effectively end barley trade with China, which is worth hundreds of millions of dollars. The COVID-19 outbreak and the summer bushfires are already anticipated to negatively affect Australia’s Grain Growing industry, with revenue expected to decline by 17.6% in 2019-20.

The Meat Processing industry is another casualty in the deteriorating relationship between China and Australia. Four major Australian abattoirs have been banned from selling red meat products into China this week, including Kilcoy Pastoral Company, JBS Australia’s Dinmore and Beef City plants, and the Northern Co-operative Meat Company. Three of these facilities are located in Queensland, and one is located in New South Wales.

China is a crucial market for Australian meat exports, accounting for close to 18.6% of total industry revenue. The Meat Processing industry is expected to decline by 6.3% in 2019-20, to $21.1 billion, as the COVID-19 pandemic constrains demand for meat products. Australia's meat processors exported 69.6% of production by value in 2018-19, with beef accounting for most industry exports. The maturity of the Australian meat market means that meat processors rely heavily on export markets to bolster sales and expand revenue.

IBISWorld reports used to develop this release:

For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647