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Indonesia FTA gives Aussie vegetable growers a big boost

Indonesia FTA gives Aussie vegetable growers a big boost article image

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) will provide new opportunities for Australian vegetable growers looking to export into this growing market, says AUSVEG.

The industry representative for Australia’s vegetable and potato growers says the IA-CEPA creates the framework for a new era of closer economic engagement between Australia and Indonesia.

This should improve two-way trade between the two countries and provide immediate opportunities for Australia’s fresh vegetable exporters.

Last financial year, Australian vegetable exports to Indonesia were valued at $3.7 million. The top commodity, potatoes, accounted for nearly half of this total.

Given Indonesia’s developing population and its proximity to Australia, this market has strong potential for local growers to boost their fresh vegetable exports, says AUSVEG.

Key outcomes for the vegetable industry from IA-CEPA are:

  • Carrots – Increased import quota of 5,000t per year, growing to 10,000t per year after 10 years, with a decreasing tariff schedule during this time.
  • Potatoes – Increased import quota of 10,000t per year, growing to 12,500t per year after five years, with a decreasing tariff schedule during this time.

“The agreement to increase import quotas and decrease tariffs for carrot and potato exports – two of the Australian vegetable industry’s key export crops – should lead to an immediate increase in the trade of these commodities to Indonesia,” says AUSVEG CEO James Whiteside.

“The finalisation of this important trade agreement aligns closely with our industry’s increased activities in market development,” Mr Whiteside said.

This includes Indonesia’s participation in the 2018 AUSVEG Reverse Trade Mission that allowed buyers from key export markets to visit Australian vegetable growers and see first-hand the high-quality produce for which our growers are renowned around the world.

Seeking to increase export value by 40 percent

“Given Indonesia is predicted to have the world’s fifth largest economy by 2030, the IA-CEPA will help ensure that Australia, and its horticulture producers, will be able to benefit from the country’s expected economic growth.”

The vegetable industry is seeking to increase its export value to $315 million per year by 2020, an increase of 40 per cent from 2016.

“We are currently in a fantastic position to take advantage of opportunities in lucrative export markets, and the industry is working hard to ensure growers have the necessary tools to be successful in the exporting process,” said Mr Whiteside.

“Trade agreements with neighbouring countries such as the IA-CEPA help provide our industry with confidence that it can continue to prosper through developing export markets, which helps secure the profitability and competitiveness of the Australian vegetable industry.”

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