August 23, 2004

China's Trade Deficit May Benefit Australian Grain Growers

China has posted an agricultural trade deficit of more than $5 billion for the first half of the year, but that could be a boon for grain growers in Australia.

The figures show that China had almost doubled its grain imports, compared with the same period last year.

Trade analyst Peter Gallagher says the country imported four million tons. Although the figure is small compared to what it produced, it could be good for Australia.

"Grains production runs at about 460 million tons: that was the number last year.

"So even if its imports reach 8 million tons, or twice of what they did in the first half, they'd represent less than 2 per cent of China's annual production.

"I think this is good news for Australia: we're seeing progressive increases in China - small progressive increases - in China's demand for grains, and we're in a good position to supply it."