Australian exports are predicted to rise between 10 and 35% over the next five years, according to a new report published by research firm IBISWorld.
Recently signed free trade agreements with South Korea, Japan and China are expected to generate much of that growth as they come into effect over the coming years.
"Asian markets, particularly China, are expected to offer significant growth opportunities for Australian products, valued for their quality, as the burgeoning middle class consumes more imported goods and focuses on greater health awareness," IBISWorld senior industry analyst Jem Anning said.
The IBISWorld reports calculates Australia’s top 20 export industries to be worth $260 billion to the Australian economy, or 15.7% of GDP.
Food is expected to lead Australia’s export boom, making up seven of the top 10 fastest growing industries.
IBISWorld said five of the main industries in the list include rice-growing, seafood processing, grape growing, cider production, and vitamin and supplement manufacturing.
Rice exports, mainly driven by rising demand from Japan, grew by an annualised 29.5 per cent over the past five years.
The value of rice exports is expected to touch $468.1 million by 2020-21, up from $380.7 million this financial year.
Nearly 97% of the industry is based in NSW, with major rice growing regions affected by drought and flooding over the past five years.
But IBISWorld predicts more stability in the next five years due mainly to the development of genetically modified crops.
And seafood processing is also forecast to boom, with Vietnam the main destination.
Seafood exports have risen by 27.3 per cent over the past five years to an estimated $1.01 billion this financial year.
“International trade has become increasingly important for the Seafood Processing industry over the past five years,” says Anning.
“Imports accounted for the majority of domestic demand and exports made up an increasingly large proportion of total revenue over the past five years.”
Vietnam is expected to receive 62% of seafood exports by 2021.
IBISWorld says Asia markets are prepared to pay a premium price for Australian seafood, which is considered to be “higher quality.”
Lifting of tariffs to boost exports
The grape growing industry has also enjoyed substantial growth, with exports rising 26.6 per cent annually over five years, to $285.3 million.
The lifting of tariffs by Asian FTA partners is expected to significantly boost exports further.
And Australia's cider producers have enjoyed buoyant growth over the last five years, in part because the signing of the FTA with Korea led to a surge in cider exports to that country.
Exports have risen 25.8 per cent annually.
The cattle industry is expected to remain Australia’s biggest food export, climbing just under 20% to be worth $1.6 billion, despite “challenging conditions” plaguing the industry over the last few years.
Boom in vitamin exports
Government policy, varying weather patterns and fluctuating turnoff rates have all had an impact on the industry, but a strong demand from the Middle East and South-East Asia is expected to help Australia’s beef stocks bring more in.
By 2021, IBISWorld expects the beef industry to be turning over $15 billion dollars annually.
The continuing expansion of Australian vitamin and supplement exports into the Asia market is also expected to continue, driven largely by major producers Swisse and Blackmores.
Industry exports have grown 13.2 per cent annually over five years, to an estimated $365 million this financial year.
Meat processing accounted for the largest segment of non-mining exports at $14.1 billion this financial year, followed by aircraft manufacturing and repairs, and beef cattle farming, IBIS World said.
According to IBISWorld, these are the top 20 industries in Australia by export growth:
- Prefabricated wooden building and manufacturing
- Bauxite mining
- Rice growing
- Seafood processing
- Grape growing
- Cider production
- Health snack food production
- Non-ferrous metal casting
- Beef cattle farming
- Citrus, banana and other fruit growing
- Carbon dioxide production
- Structural steel fabricating
- Aircraft manufacturing
- Toy and sporting goods manufacturing
- Hay and other crop growing
- Mattress manufacturing
- Milk and cream processing
- Meat processing
- Vitamin and supplement manufacturing
- Apple, pear and stone fruit growing