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Australia—Agriculture exports resilient despite slowing global growth
Demand for Australian agriculture will remain resilient in FY2026, but lower production volumes mean export values are forecast to fall 3% to $72 billion. Price forecasts are mixed, but flat on average (Chart). Slowing global growth is expected to affect demand for discretionary items like dairy and meat more so than demand for staples, which are less sensitive to lower global incomes. Indeed, price falls are forecast for beef, wool, butter, cheese and skim milk powder in FY2026. Global demand for sugar is steady, but world prices are forecast to fall 9% as low oil prices reduce conversion of sugar to ethanol fuel. On the upside, export prices for grains are forecast to rise 1.8% and remain above historical averages, while rising fruit and nut prices are supported by strong demand in China and Southeast Asia where shifting preferences for quality favour Australian produce. Prices for wine are also expected to rise, following China’s market re-opening.
While growth in China, our largest agricultural export market, has been robust in the face of trade headwinds, China’s agricultural imports fell 10% year-over-year in the first five months of 2025. Still, the relatively low Australian dollar and geographical proximity to Asian markets will support Australia’s position as a supplier of choice to the region. US demand for Australian exports—concentrated in beef—is also expected to remain strong, given existing market access arrangements and declining US beef production that will take time to respond to trade protection. Upside for some Australian exports may arise where they become cheaper relative to other suppliers facing higher US and Chinese tariffs. For instance, while Australian wine exports to the US (a top three destination) could falter with application of tariffs, China’s imports from the US could decline creating space for further Australian growth in Asian markets.
