A South Australian agriculture company has struck a deal worth $100 million to supply oaten hay to China, following recent easing of trade conditions.
Balaklava-based Balco Australia and Chinese partner Bright Farming signed the deal in Shanghai at the China International Import Expo (CIIE).
The lifting of trade impediments on hay imports to China comes at a crucial time for Balco Australia who will, over the next decade, export approximately 200,000 tonnes of Australian oaten hay to Bright Farming – a deal worth an estimated $100 million.
Balco Australia's oaten hay product will be used as a prime source of digestible fibre within the country's agricultural sector.
The deal comes just weeks after Premier Peter Malinauskas' visit to China, where Balco Australia's CEO Rob Lawson formed part of the delegation.
During the visit, Mr Lawson participated in key industry meetings with Chinese counterparts, including Bright Food Group.
Prime Minister Anthony Albanese, Federal Foreign Affairs Minister Penny Wong and Federal Trade and Investment Minister Don Farrell also recently returned from a visit to the country.
Mr Albanese, who was the first Australian Prime Minister to visit the country since 2016, met with China President Xi Jinping and described the trip as a "success".
Prior to the imposition of trade impediments in the 2021-22 financial year, South
Australian hay exports to China were worth approximately $33 million.
Following a record year for crop yields, the lifting of these trade impediments has the
potential to be particularly lucrative for South Australian farmers.
Australia is highly regarded for the national farming practices that result in a 'green and clean' reputation – boasting low nitrate soils, low potassium levels and farmers do not use GMOs.
Balco Australia is the only hay export company in Australia that undertakes rigorous quality and nutritional testing and is the only Hazard Analysis Critical Control Points (HACCP) accredited hay export company in the country.
Held annually, the CIIE strengthens economic cooperation and trade across the world. The South Australian Government has supported 21 companies to attend CIIE at the Australian Pavilion in 2023.
As put by Nick Champion
South Australia has enjoyed a long and fruitful relationship with China and its companies, and I'm pleased to see such a positive outcome from the Premier's recent visit, paying off for Balco Australia.
Our exporters have had it tough in recent years and this $100 million agreement proves how valuable face to face conversations are in building business connections.
This deal comes at a time when China has re-opened the door to Australia with the lifting of tariffs on hay exports. I look forward to seeing further improved relations between our two regions.
As put by CEO Balco Australia Rob Lawson
Balco has been privileged to have a long-term relationship with Bright Farming over many years.
Bright is one of our key customers who are always looking for good quality and safely supplied feed. We are honoured to sign this long-term agreement today and look forward to the future, seeing the continued success of the Bright Group as they continue to grow.
