GLOBAL players will provide stiff competition to Australian producers for the considerable market opportunities for agricultural exports into Asia towards 2050, a trade conference heard last week.
Department of Agriculture, Food and Fisheries agricultural commodities and trade chief commodity analyst Jammie Penm told the ABARES Regional Outlook conference in Albany, that while there was profit to be made from looming market opportunities in Asia, it was not just Australia looking to enter those markets.
"Our competitors in Latin America, the United States and and the European Union will all aim to sell products into Asia, so competition will be high and we need to maintain our competitiveness so we can take advantage of the Asian opportunity that will present towards 2050," Mr Penm said.
"We all know that with continued income growth in the Asian region and population increases there will be increased food demand in Asia and globally.
"We expect the majority of that increase in global demand will happen in Asia and also China will present significant opportunities."
Despite the sizeable potential for growth in Asian food production towards 2050, as developing Asian countries adopt modern production technology utilised in more advanced countries, ABARES modelling suggests those increases will not be sufficient to satisfy all the increases in food demand in the region.
Mr Penm said there was an expectation of world economic growth as the US economy recovers and positive economic prospects in developing Asian countries continue.
"In the emerging economies we do expect the prospects will be good, but interestingly in China, which is our largest agricultural export destination, growth will be slowing, but will still be a relatively healthy market," he said.
"So we don't expect that slowing in economic growth in China will impact very significantly to our exports."
Mr Penm said slowing economic growth in China was inevitable because the country would not be able to continue injecting public money into its economy and maintaining a growth rate of 10 per cent each year.
"Structural reform will actually provide China with more sustainable growth over the medium to long-term," he said.
Mr Penm said increased urbanisation had been a very important factor in determining food demand out of China.
"We do expect urbanisation in China will continue in the foreseeable future as population continues to move to urban regions to seek jobs and better pay," he said.
"We also expect income growth in urban areas will be much stronger than in rural areas - so that is where the majority of demand will be coming from."
Mr Penm said growth in the higher income bracket would lead to a greater demand for dairy, lamb, goat and, most significantly, beef.
He said China would need to see significant increases in food production to satisfy its domestic food demand from the growing urban population.
"In our view it is very difficult for China to maintain self-sufficiency for every single agricultural product," he said.
Beyond China, Mr Penm said ABARES did not believe there would be increased consumption or food demand in Japan or South Korea.
"That is probably reasonable because those two countries already have a very high income level for their consumers," he said.
"Population is ageing, so the prospect for significant increases for food consumption towards 2050 perhaps is less compared with other countries."
Mr Penm said it was important to note that Japan and South Korea would still be high value export destinations.
"Higher incomes will mean demand for higher quality products and they are willing to pay high dollars for those products," he said.
"In other words competition in those markets will be very strong because other exporters will also want to get into those markets and make higher returns.
"We expect competition in those markets to remain strong into the future."
Commenting on projected food demand trends in India towards 2050, Mr Penm said there was an expectation that food demand would increase significantly, but for many agricultural products self-sufficiency would remain high on the country's agenda particularly for rice and wheat.
"We do expect there are still agricultural products that will present significant market opportunities, for example horticulture, especially vegetables and fruit," he said.
"A significant portion of the Indian population is vegetarian so demand for vegetables and fruit will increase as incomes increase."
Mr Penm said there would be significant market opportunities for dairy products towards 2050.
He said there was an expectation that India may not be able to maintain self-sufficiency for wheat production towards 2050.
For the Association of Southeast Asian Nations (ASEAN) region, Mr Penm said ABARES expected there would be significant potential for wheat exports due to a lack of production.
"Of course with income growth there will be significant demand for commodities such as beef and lamb, and fruit and vegetable will be high on the agenda," he said.
"But perhaps we need to compete on a high value, high quality basis because ASEAN countries do produce a lot of fruit and vegetables themselves. So it's about the niche market and high income bracket."