Australian export of food products with special reference to processed food: Challenging issues and prospects

Exports of food products, in particular, processed food products, are becoming increasingly important in terms of export earnings for the Australian economy. The industry accounts for about 68 per cent of the total real value of food exports and 20 per cent of total Australian merchandise real export value. However, Australian real export value of processed food products accounts for about 40 per cent of total real value of agricultural food production and only for about 3 per cent of the total real value of world processed food trade. Asia and the USA are Australia's most important destinations for processed food exports, accounting for about 50 and 20 per cent of the total real value of processed food exports, respectively. The purpose of this paper is, therefore, to examine the impediments and opportunities for Australian processed food exports on world export markets. The findings of this study have revealed that Australia is highly restricted in its access to world processed food markets by the impact of export subsidies, tariffs and other trade barriers of overseas markets. The economic and political problems including rigid import controls are barriers to maintaining export sales on some of Australia's traditional Asian markets. Higher input costs also contribute to Australia's less competitiveness on world food products export markets. However, there are opportunities for Australian processed food products in the emerging markets in Asia and other world export markets. But Australia needs to give priority to diversification of export marketing, particularly in the emerging markets in Europe, Africa, Asia, the Americas and Middle East. The improvement in tariff barriers in Asia, the Americas and other emerging export markets is expected to provide improved market access and opportunities for Australian processed food. Australia is also expected to benefit from the recently concluded free trade agreement with the USA and Thailand through theliberalisation of trade. Australia should therefore implement appropriate measures to increase productivity, improve cost efficiency, and undertake market research and promotion in order to be more competitive in the long run and to capture a sizeable market share from its major global competitors (EU and the USA).