Indonesia trade deal set to boost grain exports

Grain Central May 14, 2020

INDONESIA has completed the domestic ratification process for the free trade deal with Australia, clearing the way for the bilateral agreement to come into effect on July 5 with Australian grain among the early beneficiaries.

GrainGrowers chairman, Brett Hosking, said with a date in sight for the first load of grain to be shipped, it was positive news for Australian grain growers and the nation.

Brett Hosking

Indonesia is traditionally Australia’s largest wheat export market with annual trade volumes typically around 4.2 million tonnes, valued at around $1.3 billion.

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) includes a new quota of 500,000 tonnes of Australian feed grain to Indonesia per year, growing at 5 per cent per annum. This feed grain quota is equivalent to 12,000 B-double truckloads of grains.

“Access to this new feed grain market is great news and the timing could not be better. Good seasonal conditions across our East Coast is seeing our growers planting this year’s crops with a high level of optimism,” Mr Hosking said.

“We’re proud that in an average year, Australia produces more wheat than our nation can conceivably consume because this means we have safe, nutritious grains for Australians as well as our closest neighbours.

“As Australia looks to rebuild economically, we are looking forward to the export revenue our grains will be able to bring back into the country and for our growers to be able to play our part in this recovery.”

Mr Hosking said it was a timely reminder of how important it was for the Australian government to pursue an ambitious trade policy agenda “so our world-class grains can continue to translate into jobs back on farms and an in-demand product with receptive export markets”.

Australia’s Minister for Agriculture, David Littleproud, said the agreement was great news for Australian farmers and Australia’s agricultural sector.

“Indonesia is already our 6th largest agricultural export market. This agreement will help us see the $2.5 billion export market grow even further,” he said.

David Littleproud

“There is still more work to be done on technical barriers for trade with Indonesia but this is a great basis in which to start from.

“The benefits will be across the board and is a reminder of how our farmers and the agriculture sector will continue to be the bedrock of our recovery from the COVID-19 crisis.

“There will be duty free access for 575,000 head of live male cattle per year, increasing 4 per cent a year to 700,000.

“The remaining 5 per cent tariffs on Australian frozen beef and sheep meat will be reduced to 2.5 percent and then eliminated after 5 years.

“For our grain producers there will be a guaranteed duty free access for 500,000 tonnes per year of feed grain such as wheat, barley and sorghum and that will increase 5 per cent each year.

“Dairy farmers will benefit from the elimination of 5 per cent tariff for milk and cream, concentrated or containing added sugar. There will also be the elimination of 5 per cent tariff for grated and powdered cheese of all kinds.

“And there will be improved access for citrus fruits such as mandarins, oranges, lemons and limes.

Sources: GrainGrowers, Minister for Agriculture




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