Case Studies of Australian Businesses in China
Australian Oilseeds Federation
The Australian Oilseeds Federation, AOF, is the peak body representing the Australian oilseeds industry. Between 1997 and 2001, Australia exported an average of 1.6 million tonnes of oilseeds and other edible oil-containing commodities, worth approximately $570 million per annum. On average, canola seeds accounted for just over two-thirds of these exports.
Canola seed export growth to China in recent years was extraordinary. In 1996, Australia exported no canola to China, yet by 2000, China was importing over 400 000 tonnes of canola seeds from Australia, making China Australia's largest customer for canola seeds. This growth was largely related to Chinese government policy aimed at encouraging domestic oil processing at the expense of imports of the processed product. As a result, China's oil crushing capacity expanded significantly in the late 1990s, boosted by significant multinational investment.
China's imports of oilseeds, in particular canola, fell sharply in 2001, in response to increased local production, ambiguous genetically-modified organism policy requirements and local policy initiatives. The Australian industry was hard hit by this important customer standing out of the market and has sought other new markets to meet this shortfall. Looking ahead, China will remain an important customer for Australian oilseeds, as edible oil demand is expected to continue growing with sustained gains in consumer income. However, competition in this market is likely to remain strong, particularly from Canadian canola, United States and South American soybeans and Malaysian palm oil.
Sources: Australian Oilseeds Federation, 2002; Department of Foreign Affairs and Trade, 2002.
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