Meat industry in Australia seeks free trade pact with GCC…

The Australian meat industry has reiterated its desire to sign a free trade agreement with the Gulf Co-operation Council (GCC) and is pressing the government in Canberra to enter negotiations on the issue. Industry representatives in Down Under argue that such an agreement – by lowering or abolishing GCC import tariffs and improve technical details such as expiring dates – would have favourable effects for both parties.

On the one hand, it would boost Australia’s meat exports, and on the other hand it would contribute to food security in the Gulf region where the domestic livestock industry can by no means satisfy demand.

According to Australian Meat Industry Council chairman David Larkin, the GCC and some other Middle East nations are Australia’s single largest market for lamb and mutton, but he complains that the meat industry gets little support from the Australian government’s representations in the region to push the business forward, for example by promoting the high quality of Australian meat and the fact that halal standards are obeyed.

Food exports from Australia to the Middle East are worth around $2.7bn a year, and most of it is meat and livestock. The region accounts for 29% of Australia’s total lamb exports and 34% of mutton exports, according to figures provided by industry association Meat and Livestock Australia.

The Middle East also accounted for 97% of Australia’s live sheep exports in the country’s last fiscal year ending in June, with Kuwait being the largest market at an import volume of $54mn, in addition to $47mn in processed meat. The UAE imported $140mn worth of Australian meat in the period, Saudi Arabia $151mn worth of beef and Iran $40mn in meat.

However, livestock exports to the important Saudi market declined because Saudi Arabia has purchased cattle farms in East Africa for its own supply.

Observers say that meat trade talks with the GCC could be challenging given that fact that similar deals with Japan, Korea and China have taken years and the Middle East has a more complex structure and different requirements.

Apart from moves to pursue a meat trade deal, Australia is promoting food security investments from the GCC in Down Under and has approached several sovereign wealth funds and investors in the region.

Qatari company Hassad Food, owned by Qatar Investment Authority, has already invested $425mn in Australian grain and sheep meat farms, and the Abu Dhabi Food Control Authority backed by Abu Dhabi’s sovereign wealth fund ADIA is looking at investments in the food supply chain from Australia, according to Paul Morris, director of the Australia Arab Chamber of and Industries.

Australia produces around 4% of the world’s beef supply and is the world’s largest beef exporter behind Brazil and India. Its main export markets are the US, South Korea, Japan and – since recently – China. The value of beef exports in the fiscal year 2012-13 was over $5bn. The country is also the world’s largest exporter of mutton, live sheep and goat meat. The entire cattle herd in Australia comprises 28.5mn animals, which outnumbers the population living on the continent of some 23.1mn.