Opportunities in Agribusiness

Asia's rising middle class

By 2030 Asia’s middle classes will have grown to more than three billion people. In particular, as China’s economic development continues, consumers will increasingly be demanding higher-protein food sources such as dairy products, beef, seafood and sheep meat.

Big opportunities, but less action

Here’s where Australia’s big opportunity lies: in the production, processing and distribution of premium foods and also wine and other high-value beverages. Yet cooperation between Australian and Chinese businesses is still in its infancy and the number of successfully completed and implemented deals remains modest.

Australia’s strengths

Australia’s competitive strengths in supplying premium produce to China include: an abundance of arable land; an unsurpassed reputation for producing safe, clean, green food; a record of farmer innovation and adaptability to challenging climatic conditions; a strong economy and stable political system; and a transparent legal system.

Australia’s weaknesses

However, Australia also has competitive weaknesses, including: vulnerability to drought; a high cost structure; an ageing farming population and associated rural labour shortages; and fragmentation of prime agricultural landholdings.

Fixing Australia’s weaknesses

Remedying these weaknesses, including through farm consolidation, modernising and expanding food processing capacity and upgrading and expanding storage and transport infrastructure, will require an estimated A$1 trillion between now and 2050.

An Australia China Food Summit

Numerous conferences and seminars have been held over the past few years confirming the size of the opportunities. It is time to move from the conceptual to the practical by identifying and removing the obstacles to successful transactions being concluded.

The Australia China Business Council is convening such a practical Food Summit on 23 May 2014, bringing together Chinese and Australian investors with the aim of lifting the number of successful business deals. You are most welcome. Details are at http://www.acbc.com.au/default.asp?id=1,3,15,1094