The Grains Council of Australia has welcomed a new sale of one and a half million tonnes of Australian wheat to China as an indication of the potential of an Australia/China Free Trade Agreement.

GCA President Keith Perrett said that the new sale by AWB International was ‘icing on the cake’ of an earlier 1 million tonne sale and it represented a significant proportion of the 9.5 million tonne import quota announced by China earlier in the year.

“We’ve sold 2.5 million tonnes to China in the past twelve months. Their annual domestic demand for wheat is in excess of 100 million tonnes PA, which represents about 1/6th of annual global consumption”, Mr Perrett said.

“China faces significant pressure on its agricultural base, urban encroachment and environmental degradation. Of particular concern are dropping water tables and soil salinity; issues shared with the Australian industry. The message here is that Chinas production base is shrinking as its demand for food and feed grain is increasing”, he said.

“Australian grain producers have a great deal to gain from an FTA with China, and over the past few months we have been urging the Government to press ahead, using the experience we have gained from the recently completed agreements with the USA, Singapore and Thailand, toward an FTA with China by July 1st 2005”.

“Opportunities will exist for Australia’s grain producers to export specific varieties of high customer value “IdP” ” (Identity Preserved) grains to be used for higher value consumer foods”, he said.

“There will also be potential for Australia to export customised feed grains for Chinese intensive livestock production, and provide compound feed manufactured in Australia for intensive livestock and aquaculture production incorporating Australian developed feed grain technologies”.

“Agriculture in Australia will also benefit from integrated joint venture feed and intensive livestock production in both China and Australia, and the export of Australian food production knowledge capital, farming techniques and technology”.

“China will, in the next 5 years, become a plant technology powerhouse, with opportunities for the Australian grains industry to work cooperatively to develop and commercialise advanced plant technologies”.

“With this technology we will finally be able to combat otherwise intractable natural resource management problems and develop cultivars that will allow our industry to adapt to climate change. We will also be able to significantly reduce greenhouse gas emissions from grain production as part of our industries environmental responsibilities”.

“This is a key part of our grains Single Vision strategy and is central to the development of sustainable prosperity for grain producers, their families and their communities”.

“An FTA with China will allow the Australian economy to link with an economy experiencing the most rapid growth in the world, with enormous growth potential. The Chinese economy is predicted to be the largest in the world by about 2020 / 2025”, he said.