December 5, 2007

 

Australia to win big from rising demand in Asia

 

 

Asia's demand for resources is leading to a boom for the agricultural industry in Australia, with dairy producers expected to benefit most, according to an Australian Farm Institute study.

 

Beef, pork, feed grain and fodder producers can expect strong demand for animal protein products from a more affluent Asia while sheep meat, chicken meat and live exports would also benefit.

 

The study, by the AFI and the Rural Industries R&D Corporation, looked at growth trends during the next 13 years in 12 Asian nations. The study concluded that Asia would boost its import of both chicken and pork by 1 million tonnes while beef would be nearly 2 million tonnes. Dairy produce would see the greatest increase of 5.2 million tonnes.

 

Demand for feed grains such as corn, sorghum and oil seeds, could also grow by 350-450 million tonnes a year by 2020 -- 20-30 per cent more than current world production.

 

Asian consumption of these products could jump by as much as 50 percent a year by 2020, the study said.

 

However, the study noted that industries must overcome the problems of capacity limits and marketing while boosting research to stay ahead of competitors.

 

Australian agricultural groups welcomed the findings.

 

Australian Dairy Farmers president Allan Burgess said demand for Australia's agricultural goods would mirror that of Asia's demand for Australia's iron ore as it developed its own steel industry.

 

While there is strong demand abroad, it is domestic factors which might hinder production, chief among them Australia's droughts and water shortages which has become more frequent in recent years. Another obstacle would have been the rising production of biofuels worldwide, which would drive up grain prices and production costs.

 

Although the dairy industry had the best opportunities in Asia, it would need to increase cow numbers, lift milk yields, and fight drought better while expanding the range of processed products being offered, the study said.

 

The study also suggested that the country look at its northern regions for a new production base and launch a research effort to lift corn and oilseeds production, including new varieties suited to southern areas.

 

Although sheep meat producers could enjoy growth in China and Malaysia, the chicken meat industry would be hindered by poor export capacity and regulations, it said. Live animal exports also faced an uncertain future as more supermarkets and better refrigeration facilities make chilled meat a better option.