AN ANZ commodity update has reported that the current global spate of agricultural export bans could potentially have long term benefits for Australian farmers.

More countries are banning agri exports than at any time since the 2008 food price crisis, including wheat and sugar exports from India, and a temporary ban on palm oil exports by Indonesia which contributed to a surge in most oilseed prices.

Also, Egypt, hit hard by the loss of wheat exports from Ukraine, has banned its own exports of wheat, flour, lentils, pasta and fava beans, in a bid to maintain food security.

Australia has ample food production to provide for its citizens and export markets, however many other countries have legitimate concerns, and their export bans may end up being of benefit to Australian farmers in several ways.

Many countries want to ensure that they have reliable long term suppliers of grain and other exports, and with Australia having no history of export bans, this makes us very much a preferred supplier, a reputation could bode well for enhanced long term trade relationships.

ANZ’s acting head of food, beverage and agribusiness, Natasha Kemp, said the bans did not only impact grains and oilseeds, already in tight supply due to the Ukraine crisis, but other agri products including sugar, chicken and processed foods.

“While the bans are aimed at individual countries ensuring domestic food supplies and reducing food price inflation, they can also have far wider impacts for populations in importing countries, as well as entire food supply chains,” she said.

The reduced supply of goods caused by trade bans, as well as the heightened concerns about availability, both serve to push up the prices of the agri products Australia currently exports, an impact which flows back the producer.

Longer term, when other countries restrict their exports, it can result in their own agri production volumes falling, as producers are less incentivised to grow large crops or produce large herds, leading to further upward price pressure globally.

Additionally, several importing countries will seek to grow their storage capacity of commodities including grains, frozen meat and milk powders, further increasing demand for Australian agri exports.

As has happened in the past, ultimately supply issues will ease, and the agri trade bans will fall away, but for the time being they are likely to continue to have a major impact.