Australia's total wine exports reached A$2.2 billion, and the resumption of imports from the Chinese market brought new opportunities
2024-08-17
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Wine Australia released its latest export report (July 1, 2023 - June 30, 2024). The report shows that the total export value of Australian wine increased by 17% to A$2.2 billion in the past year, but the export volume decreased by 0.2% to 619 million liters.
The report mentioned that the increase in export value was due to the cancellation of China's tariff policy on Australian wine in March 2024. Therefore, in the last three months of this fiscal year (April to June 2024), Australian wine exports to the Chinese market surged. This also made China the largest export market for Australian wine in terms of export value and ranked fourth in terms of export volume.
Australia's exports surge in both volume and value
On March 28, China's Ministry of Commerce issued an announcement, announcing that it would stop collecting anti-dumping and countervailing duties on imported wines originating from Australia from March 29. The Ministry of Commerce stated in the announcement that in view of changes in the Chinese wine market, it is no longer necessary to collect anti-dumping and countervailing duties on imported wines originating from Australia.
At the same time, information from the World Trade Organization (WTO) showed that China and Australia had submitted a notification to the WTO dispute settlement body, reaching a mutually agreed solution to the "China's anti-dumping and countervailing duty measures on Australian wine."
After China terminated its anti-dumping and countervailing policy on imported wines originating from Australia at the end of March, the trade chain reacted quickly. At that time, the first batch of containers loaded with Australian wines bound for China left the Port of Adelaide, Australia immediately after the announcement was released.
Data from the Australian Wine Association shows that from April to June 2024, the volume of Australian wine exports to the Chinese market surged from 1 million liters in the same period of the previous fiscal year to 33 million liters, and the export value also soared to 400 million Australian dollars from only 8 million Australian dollars in the same period of the previous fiscal year (the latest exchange rate: 1 Australian dollar is approximately equal to 4.74 yuan).
It is worth noting that the report data shows that wines priced at A$20 per liter or more are the main factor in the growth of exports, which has also directly driven the current average price of Australian wine exports to the Chinese market from A$7.90 per liter to A$12.31 per liter.
Specifically, wines with an FOB price of AUD 20 or more per litre accounted for 83.25% of the export value, or AUD 333 million, compared to just AUD 3 million in the previous fiscal year. The export volume increased from 64,000 litres to more than 5 million litres, accounting for 17% of the total.
In the 2023-2024 fiscal year, 574 Australian companies exported wine to China, up from 115 in the previous fiscal year, and 90% of them started exporting in this fiscal year. In terms of export value to China, the top ten companies contributed 75% of the export value and 39% of the export volume.
Today is different from the past
Although Australia's wine export value and volume have seen dramatic changes in just three months since imports resumed in the Chinese market, Australian wine market insight manager Peter Bailey said that the export growth to China is still only a small part of the market's historical peak.
“While these figures are very positive and represent a re-positioning of Australian wines after a long absence from major markets, this does not necessarily equate to sales channel performance,” Bailey said. “It will take some time to become clearer as to how Chinese consumers will respond to and digest the increased supply of Australian wines in the market.”
In addition, Bailey also said that "China's domestic and imported wine volumes are less than a third of what they were six years ago, so Australian wine exports to China are unlikely to return to their previous peak in the short to medium term."
According to the General Administration of Customs, from 2015 to 2019, the volume of wine imported by China from Australia doubled from 56,642 kiloliters to 120,811 kiloliters. In particular, in 2019, according to the China-Australia Free Trade Agreement, after the implementation of the fifth round of product tax cuts, Australian wine imports entered the "zero tariff" era. That year, China's imports of Australian wine also exceeded French wine, ranking first in the total share.
Australian data shows that wine exports to China reached 1.3 billion Australian dollars in 2019, which is more than the total exports to the United States, Britain, Canada, Singapore and other countries.
Regarding the question of “how quickly” Australian wine can recover its market share in China, Tang Rui, general manager of Greater China at the Australian Trade and Investment Commission (Austrade), previously told Caixin that exporters will re-establish connections with importers and customers, so this process will take a long time and require patience.
Excluding exports to China, Australia's wine exports to the rest of the world fell 4% to A$1.8 billion in fiscal year 2023-2024, while exports fell 5% to 587 million liters. This is the lowest level of Australian wine exports to the rest of the world since fiscal year 2003-2004.
In this regard, the report believes that "the global trade environment remains very challenging, with wine consumption continuing to decline in many markets, shipping problems persisting, a global shortage of ships, and rising freight and charter rates."
(Intern Wu Jiayi also contributed to this article)
(This article comes from China Business Network)
