SYDNEY, May 24(Xinhua): The arrival of China's Agricultural Bank (ABC) and Australia's hard-push on Asian free trade agreements is expected to soon bear fruit, with research this week signaling a strong increase in revenue for the agricultural sector and a blooming opportunity on the Asian horizon for the rural industries.
IBISWorld research, released Thursday shows Australia currently generates around $67.3 billion (61 billion US dollars) across a host of agricultural categories - but CEO Dan Ruthven says the sector will grow by 5.7 per cent from 2014 to hit $71.1 billion ( 65.7 billion US dollars) in 2019.
"Australia is very well placed to take advantage of our highly productive soils, efficient farming practices and geographic position on the doorstep of Asia," according to Ruthven.
HSBC's Chief Economist Australia and New Zealand Paul Bloxham told Xinhua in an email that Agriculture should be a key growth sector, as emerging market boost demand for agriculture.
"Rising incomes in Asia should also present significant trade opportunities for the tourism, education and business services sectors," Bloxham wrote,"The global center of activity is shifting increasingly towards Asia and Australia is well- placed to continue to take advantage of the opportunities this will present."
The news does not surprise industry experts, with Bruce McLaughlin, Director of consulting firm Sinogie, hailing the arrival last month of rural lender Agricultural Bank of China (ABC) which opened its first Asia-pacific branch in Sydney.
China is Australia's largest trading partner and while investment in the mining sector continues to wane, Sinogie believes agriculture will be the next boom sector. "ABC is the fourth big State-owned Chinese bank to set up a branch here," McLaughlin told Xinhua. After winning approval as a foreign, deposit-taking institution by the regulator here, the (APRA) Australian Prudential Regulation Authority, ABC will reportedly focus on wholesale banking during its initial phase.
However, the arrival of such a key player, with both Chinese
domestic and international experience is a strong endorsement of Australia's potential "I think this shows that Chinese banks really do have a great deal of confidence in Australia. We're a good first step into global financial markets."
Fortune magazine's Global 500 has already listed the ABC as the world's 64th largest company with total revenue an impressive $ US103.5 billion.
Mclaughlin added, "There are great opportunities for Chinese investment in Australian agriculture, and for Australian investment in Chinese agriculture."
"There are obvious synergies between the two markets, and there 's a great deal of trade in agricultural products: we need banks that have the necessary expertise in agriculture and the ability to operate in both markets. On top of this, Australian farmers are short of capital, and need better access to loans: there's a clear opportunity for ABC to move into this sector."
Australia's trade has increasingly shifted towards Asia, led by resource exports, according to HSBC.
Strong demand, particularly from China, has boosted demand for Australia's key resource exports - first in commodity prices and now in terms of export volumes.
In 2013, China took a total of 32 per cent of Australia's exports, exports that stood at just 5 per cent in 2000, - iron ore and coal exports accounting for the majority of the total increase.
IbisWorld research has also singled out hydroponics and organic farming as among the undiscovered potentialities within the Australian farm sector.
ABC is headquartered in Beijing and operates 24,000 branches in mainland China and around the world.
