Brexit impacts for Australia’s ag trade relatively limited
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Direct Brexit impacts for Australia’s agricultural trade relatively limited

The direct trade impacts of Brexit on Australia’s agricultural sector are likely to be relatively contained, Rabobank says in its June Agribusiness Monthly report released today.

The global agribusiness banking specialist says with the United Kingdom and the EU-27 nowadays only contributing a relatively small share of Australian food and agricultural (F&A) exports – 1.4 per cent and 4.6 per cent respectively by value – the direct trade implications of the UK’s historic decision to leave the European Union would be limited for the agricultural sector as a whole.

However, the report notes, for some sectors – particularly wine and sheepmeat– the direct export exposure is more significant.

Rabobank senior analyst Marc Soccio says these sectors in particular would be exposed to any sustained negative impact Brexit had on the UK economy and household incomes, as well as price inflation due to adverse currency moves.

“These sectors, in addition to wool and canola, are also the more significant Australian exports to the EU-27,” he said.

UK & EU-27* share of Australian F&A exports, 2015



Share of value 


Share of value
















Total F&A exports



*Excludes the UK

Source DFAT/Rabobank 2016

Mr Soccio said for Australia’s wine sector, in particular, the UK had long been its largest export market by volume, taking one-third of all wine volume exported by Australia to the world.

For dairy, the reports says, any weakening of the euro resulting from Brexit could also increase the competitiveness of European dairy products in already over-supplied global markets.

For the beef sector, Mr Soccio says, from an Australian export perspective, the EU and UK markets are relatively small in volume terms, but represent a valuable market.  “Apart from the financial and currency impacts of the Brexit decision, which have the ability to impact beef trade, the biggest question for the Australian beef industry will be around what might happen to the quota positions into the EU and UK,” he says.

The report says the implications of Brexit on both market access and UK food prices would need to be watched in the future.

“It remains to be seen how trade tariffs, duties and quotas may change between the UK and the EU-27 and how elimination from the Common Agriculture Policy (CAP) impacts UK food producers.  Any imposition of trade barriers and reduction in producer subsidies would act to raise the cost of food sourced domestically and from the EU-27,” Mr Soccio said.

“A depressed British pound would also inflate food prices in the short term.  In the longer term, high food prices may be alleviated through free trade agreements beyond the EU.”

Looking at the broader economy, the report says volatility in financial markets naturally raises concerns over any longer-term spill over into the real economy around the world, coming at a time of heightened tension in financial markets and fragile global economic growth.

“The British pound has plunged, and the flight to safety by investors has pushed the US dollar and Japanese yen sharply higher against a large basket of currencies, including the Australian dollar,” Mr Soccio said. “In the near term, investor risk sentiment will remain the predominant driver of currency market movements and heightened volatility is to be expected, with some risk of increased intervention by policy makers in currency markets.


Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 115 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading rural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.

Media contacts:

Denise Shaw
Head of Media Relations 
Rabobank Australia & New Zealand 
Phone: 02 8115 2744 or 0439 603 525 

Skye Ward
Media Relations Manager
Rabobank Australia & New Zealand
Phone: 02 4855 1111 or 0418 216 103