Best of 2015: Australian agri set for ‘most buoyant period in decades’

Colliers International's property outlook for 2016 says appetite for protein in Asia demands more food supply-chain infrastructure.

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Real estate company Colliers International has said that increased protein exports will fuel demand for more cold storage and supply-chain infrastructure in Australia.

In their property outlook report for 2016, Colliers said as exports increase, “the Australian agricultural sector is poised for its most buoyant period in decades”.

The property and asset management specialists added that Australian agribusinesses would benefit from increased commodity returns as well as interest from national and international investors.

More food exports also means that Australia will need more storage spaces along the food supply chain. There is a demand for cold storage, “particularly in domestic distribution hubs and surrounding export points such as ports,” the report said.

Colliers’ outlook for 2016 says that Australian protein exports will continue to rise as the Asian middle class’ appetite for meat and dairy increases.

It is also expected that primary producers and collectives will increase their presence along the supply chain.

“The execution of a number of free trade agreements with China, South Korea, and Japan will phase out a number of tariffs of up to 40 percent on a range of Australian meat and livestock products,” said Colliers national director for rural and agribusiness in Australia, Shane McIntyre, in the report.

“Coupled with the weaker Australian dollar, [that] will reduce the price premium on Australian protein products on shelves for consumers and restaurants.”

The outlook report said that Asian consumers continue to perceive the country’s meat and dairy produce as safe and superior in quality than local alternatives. The Chinese baby milk scam in 2008, which left six infants dead and over 50,000 hospitalised, have ensured that many in Asia will show a preference for Australian meat and dairy. Reduced prices could then lift demand for Australia’s protein products even more.

“The likely limiting factors are on the supply side,” said McIntyre. Because of drought and a record rise in the number of slaughters in recent years, Australia’s Meat and Livestock Association has suggested slaughter rates will slow in 2016 as there are fewer livestock available. Citing the association’s forecast, McIntyre added that later next year, stocks are expected to recover.