Australia lowers forecast for beef exports to China as trade ties sour

Australia has lowered its forecast for beef exports to China, its largest buyer, by 1.5% for the 2020/21 season, the country's chief commodity forecaster said on Tuesday, as trade relations sour. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said it now expects China to buy 227,000 tonnes of beef in the year to June 30, 2021, compared with 230,000 tonnes in its March estimate.

Australia has lowered its forecast for beef exports to China, its largest buyer, by 1.5% for the 2020/21 season, the country's chief commodity forecaster said on Tuesday, as trade relations sour.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said it now expects China to buy 227,000 tonnes of beef in the year to June 30, 2021, compared with 230,000 tonnes in its March estimate. That would amount to 30% less than in the year earlier period. The lower forecast comes after China in May suspended exports for four of Australia's largest beef exporters, citing labelling issues. Australian government sources have said recent bilateral tensions are likely behind the suspension.

Labelling issues were also cited by Beijing when the same companies and two others lost their licences to ship beef to China in 2017 for several months. Australian-China relations soured after Canberra called for an independent inquiry into the origins of the novel coronavirus.

Meanwhile, ABARES said Australian wheat exports will jump to 16.5 million tonnes during the 2020/21 season. ABARES last week raised its estimate for wheat production by 25% as a crippling three-year drought finally ends.

Australia is among the world's top 10 exporters of the grain, which typically contributes about 2% to the country's gross domestic product.