Australia’s peak commodities forecaster has warned China’s blockade of Australian wine amid growing trade tensions between Canberra and Beijing will affect the nation’s exports during 2020/21. An ABARES report released today forecast a 7 per cent fall in total agricultural exports to $44.7 billion — the lowest level in five years — citing the drop in wine trade with China and the challenges in sourcing staff in the horticulture industry. While that is a slight improvement from its September estimate of a 10 per cent slump, the downturn comes in a year of solid domestic production growth. China late last month slapped anti-dumping duties of up to 212 per cent on Australian wine on top of trade measures that impact other commodities including timber, barley and lobster. ABARES said the average value of Australian red wine exports would fall because high-quality wine previously destined for China will be sold into other markets at lower prices. “To date exports of barley and wine have been most affected,” the December-quarter 2020 Agriculture Commodities report said. “Australian barley has been diverted to other markets, and exports of high-value wines to China spiked in anticipation of the anti-dumping security deposits introduced in late November 2020. The introduction of anti-dumping security deposits is expected to significantly reduce wine exports to China. “Australia may be able to divert a limited amount of wine to existing markets such as the UK and US, but a lack of access to the Chinese market will likely reduce production value and sales in 2020/21.” ABARES executive director Steve Hatfield-Dodds said producers continued to find markets during the pandemic but the residual effect of past dry seasons and trade uncertainties were pushing down export value. The expected fall in exports comes despite forecasts of Australian farmgate production reaching a record $65 billion in 2020/21 — 7 per cent higher than a year ago — on the back of the nation’s second-biggest winter crop and promising rainfall outlook. The report points to continued recovery for the farming sector from drought and resilience in the face of COVID-19. ABARES also warned China may impose trade restrictions on Australian wheat exports. While China historically hasn’t been a key market for Australian wheat — accounting for about 10 per cent share last year — high domestic grain prices could push China’s 2020-21 imports to the highest in 25 years. This demand will likely be met by cargoes from the US and the Black Sea region, though smaller exportable surpluses from these major shippers will give Australia an opportunity to meet demand in other markets, ABARES added.