Terrible news for Australian farmers as Chinese cotton mills are ordered to STOP buying our products – risking $611million a year being wiped from the economy
- China told its spinning mills to stop ordering cotton from Australian growers
- A 40 per cent tariff on Australian cotton could also reportedly soon be enforced
- China has already placed sanctions on barley and beef imports from Australia
- Agriculture Minister David Littleproud said it was a significant concern
Australian cotton growers could be the latest victims of increasingly bitter trade tensions with China.
Chinese spinning mills have been told to stop buying Australian cotton and the industry could soon face tariffs of up to 40 per cent.
Cotton millers in China are given an import quota each year, but have been told they may not receive the allowance if they buy from Australia.
Every year, 64 per cent of Australian cotton is exported to China, in deals worth $611million.
Now the Australian commodity could be the latest import to be slapped with a trade sanction since May, when a trade war between the two nations flared up.
China placed sanctions on barley and beef imports after prime minister Scott Morrison called for an inquiry into the origins of COVID-19.
Agriculture Minister David Littleproud said the reports about the cotton sanction were a significant concern for the industry.
Australian cotton growers could be the latest victims of increasingly bitter trade tensions with China (pictured, a farmer near Dalby on the Darling Downs in Queensland)
China placed sanctions on barley and beef imports after prime minister Scott Morrison called for an inquiry into the origins of COVID-19 (pictured, sunset on a WA farm)
‘We are working as quickly as we can with the industry to get an appreciation of the scale and the veracity of this,’ he said in Canberra.
‘We’re not going to jump the gun but we think it’s important that Chinese officials give us clarity with respect to this.’
He called on China to respect international trade rules and engage with Australia.
‘We’re playing under a fair marketplace. We expect everyone that trades with us to do the same,’ he added.
Australia sells about $800million worth of cotton to China each year and industry groups are disappointed by the deterioration in export conditions.
Cotton Australia and the Cotton Shippers Association are working with the federal government to investigate what is going on.
Australia has been accused of going too hard on china as tensions between the two countries continues to rise (pictured, Scott Morrison shakes hands with Chinese President Xi Jinping)
Value of Australian agriculture exports to China:
Beef: $2.8billion or 25 per cent
Wool: $1.9billion or 77 per cent
Lamb: $1.2billion or 30 per cent
Fruit and nuts: $1billion or 40 per cent
Seafood: $770million or 58 per cent
Dairy: $661million or 26 percent
Cotton: $611million or 64 per cent
Wheat: $568million or 15 percent
Barley: $550million or 54 per cent
Hides and skins: $420million or 85 per cent
Oilseeds: $374million or 16 per cent
Live animals: $356million or 16 per cent
Sugar: $46million or 3 per cent
Vegetables: $39million or 3 per cent
Total: $12.6billion or 32 percent
‘The Australian cotton industry will continue having meaningful conversations with stakeholders to fully understand this situation,’ they said in a joint statement on Friday.
‘We will continue working with the Australian government to respectfully and meaningfully engage with China to find a resolution.’
Trade Minister Simon Birmingham is seeking clarity from Chinese officials.
‘Our cotton exporters have worked hard to win contracts and establish themselves as reliable suppliers of high quality cotton in the Chinese market, which is an important input for many Chinese businesses,’ he said.
‘China should rule out any use of discriminatory actions against Australian cotton producers.
Chinese Ambassador Cheng Jingye in April threatened that China consumers may boycott Australian red meat and wine over the coronavirus inquiry.
The totalitarian nation followed through on their intimidation tactics by launching an inquiry into allegations that Australia was dumping wine in China, the practice of selling wine below the cost of production.
The move follows huge tariffs on Australian barley and the banning of four of Australia’s largest red meat producers in May.
Barley tariffs are now at 80 per cent, with the $550million Chinese market representing 54 per cent of all Australian barley exports.
Prime Minister Scott Morrison denied the allegations of dumping and said there was no evidence to support them.
China has targeted Australian beef, barley and wine in recent months and has reportedly enforced a go-slow on importing coking and thermal coal
The trade sanction has already led to a 38 per cent plunge in cereal and grain exports, official trade data revealed.
CommSec senior economist Ryan Felsman previously said China’s economic trade sanctions against Australia were beginning to show.
‘Could the escalating political spat between Australia and China be starting to bite?,’ he said.
‘Not good news for our farmers hit by bushfires, drought and COVID-19 restrictions.’
Mr Littleproud refused to say if the government was concerned about other agricultural commodities.
‘To speculate on any particular industry won’t advance agriculture in this country,’ he said.
He said exporters should look at other markets to avoid concentration.
‘The government doesn’t tell our exporters to go and export to China. That is a commercial decision they make themselves.’
The graph shows that China scoops up one third of all Australian food and agriculture exports