While bullish prices and production have propelled Australian agriculture to unusually buoyant levels in the past three years, global farm sector trade is now struggling with the squeeze from a spate of overseas export bans.
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More countries are banning agricultural exports than at any time since the 2008 food price crisis.
ANZ Banking Group and the Australian Bureau of Agricultural Resource Economics and Sciences have highlighted how bans on commodities, ranging from sugar to chicken and processed foods, reflected fears about domestic food supplies in many countries and urgent attempts to keep a lid on food inflation.
That unease also extended well beyond concerns about the impact Russia's war in Ukraine had on global grain trades.
ANZ's latest agri commodity report suggested the situation may even deliver some trade gains for Australian farmers, seen as reliable long term suppliers.
It noted export restrictions imposed in the past year in India, Indonesia, Russia, Malaysia, China, South America, the Middle East and other countries had not always attracted much attention outside their immediate regions, despite having an impact on millions of consumers.
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ABARES' Insights report estimated about 24 countries had export restrictions, but government export limits actually increased food insecurity and prices.
Executive director, Jared Greenville, said notable lessons learnt from the 2007-08 food crisis showed how restrictions cut food availability in global markets and inflated prices, creating more incentives for other countries to also restrict exports.
ANZ's acting head of food, beverage and agribusiness, Natasha Kemp, said current bans were not just for grains and oilseeds, already in tight supply due to the Ukraine crisis, but other popular agri commodities which could have far wider impacts across food supply chains.
While some, such as India's bans on wheat and sugar were well publicised, she said others, including Indonesia's temporary palm oil export ban, drifted under the radar, despite contributing to a surge in most oilseed prices.
Egypt, hit hard by the loss of wheat exports from Ukraine, had banned its own exports of wheat, pulses, flour and pasta in a bid to maintain food supplies.
Argentina's export beef ban last year contributed to higher global prices and prompted concerns among meat importers about other South American countries restricting supplies, too.
Ms Kemp noted, however, the trend to more export bans may end up helping Australian farmers in a number of ways, potentially reinforcing our position as a preferred export source.
Australia had ample food production for local and overseas markets and no history of export bans, which could enhance long term trade relationships in an increasingly unpredictable and easily disrupted global environment.
In the longer term, restricting exports in other countries may also result in their own farm production volumes falling as producers had less incentive to produce large crops or large herds, which could result in further global price pressures.
Aussie prices lift
In the meantime, tighter global supplies caused by trade bans, as well as heightened concerns about availability, also pushed up prices for Australian exports, which helped producer returns.
Additionally, several importing countries would seek to expand storage capacity for grain, frozen meat and milk powder, further increasing demand for Australian farm exports.
ABARES' Dr Greenville said while export bans by some countries were understandably aimed at moderating domestic prices and easing the burden on their own populations, widespread export restrictions actually increased nervousness about global food security, hurting the poorest people.
"Removing export restrictions, or having agreements to avoid implementing them in the first place, can help to ensure food is more available globally and increase food supply stability," he said.
ANZ acknowledged supply issues would ultimately ease, and agri trade bans fall away, "but for the time being they are likely to keep having a major impact".
For example, India's wheat export ban was expected to have a short term effect and other global grain and oilseed stocks were now improving, slightly.
However for wheat, stocks-to-use ratios were likely to shrink from 36 per cent to 34pc - or 10 weeks' global supply.
Sense of optimism
ANZ's agribusiness head, Mark Bennett, said with strong commodity prices, more strong crop yield prospects and land values still rising, Australian agriculture seemed to be approaching every hurdle with a sense of optimism.
Although labour supply issues, higher interest rates and rising key inputs costs, such as fuel, fertiliser and chemical, presented very real challenges, he said in many ways the industry was in "a completely different place than it was just three years ago".
"We seem to have entered a new more buoyant era," Mr Bennett said.
"One dry season could change the picture markedly, but for now the industry has a new set of expectations for what is considered normal."
ANZ's view for the 2022-23 winter crop was for slightly more planting area than last season because some marginal livestock country was likely to be cropped to take advantage of soil moisture levels and strong prices.
This could suggest another record harvest on the horizon, although many producers could minimise fertiliser and chemical use this year, which may impact the ultimate yield.
Mr Bennett noted the beef and dairy cattle sectors were trading at new levels, with ANZ tipping the Eastern Young Cattle Indicator price would continue to hold above 1000 cents a kilogram for the foreseeable future, and 2022-23 milk prices were opening at an unprecedented point of almost $9/kg of milk solids.
Cotton's soaring market had retreated but values still looked good, while the sheep and wool industry also continued to enjoy steady and strong prices.
"As producers ponder the current year, for most it is through rose-coloured glasses - and understandably so."
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