Australia’s Top 10 Imports and Exports: Where Does Your Industry Sit?
International trade is integral to Australia’s economy and especially to the shipping and logistics industry. International shipping, the industry that facilitates the majority of trade worldwide, heavily relies on global economic partnerships for strong levels of growth. Australia enjoys the benefits of numerous free trade agreements with other countries whilst importing and exporting several goods ranging from machinery and minerals, to meat and aluminium.
If you’re looking to discover what Australia’s top ten imports and exports are (and where your industry sits in the mix), then this is right place. We’ll explore some of the industries that make up Australia’s international trade as well as who are the most important partners and players for Australian imports and exports.
Australia’s Top Ten Imports
Australia is an export nation, generating yearly exports of around $195 billion and importing around $187 billion per year. The country has achieved a positive trade balance of around $8 billion, yet we also rely heavily on imports.
Below we’ve put together a list of imports during 2018 ranked one to ten based on dollar value. We have also provided the percentage amount to demonstrate how much the commodity and/or product represents of Australian imports.
#1 Machinery (AUD$46.2 billion)
Representing about 14% of Australian imports, machinery formed Australia’s largest import in 2018. The level of machinery imports has consistently been high, also representing $47.2 billion worth of Australia’s imports in 2016.
This is not surprising given the investment in infrastructure and construction around Australia. Australians import everything ranging from computers and generators to centrifugal pumps, which are essentially ‘capital’ goods that help Australians make other goods.
#2 Mineral fuels (AUD$43.9 billion)
Mineral fuels represent around 13.3% of Australian imports, and this rapidly grew by around 33% from 2017 to 2018. Australia imports mainly all its oil and is on the path to becoming 100% reliant on imports for petroleum in 2030.
Just over half of Australia’s imported refined petrol is imported from refineries in Singapore, followed by refineries in South Korea and Japan.
#3 Vehicles (AUD$43.6 billion)
Vehicles account for over 13% of Australia’s imports. In 2018, this included the importation of cars, trucks, automobile parts, tractors, trailers and more. Cars alone accounted for $24.3 billion in imports.
The importation of specialised vehicles grew significantly. Imports of special purpose vehicles grew by up to 97% from 2017, whilst the imports of armoured vehicles and tanks escalated by over 16%.
#4 Electrical machinery and equipment (AUD$37.1 billion)
Australians love using electrical equipment – so it contributed around 11.3% of Australia’s imports in 2018.
By far, the number one electrical piece of equipment forming the bulk of Australian imports were mobile phones, including smartphones. This alone accounted for about AUD$12.3 billion in Australian imports. The import of solar power products also increased significantly by 62% compared to 2017, as did electric generating sets and converters which increased by just over 52%.
#5 Medical/technical equipment (AUD$12 billion)
Optical, technical and medical equipment account for around 3.7% of Australian imports. This includes goods like electro-medical equipment such as x-rays and blood fractions.
#6 Pharmaceuticals (AUD$11.8 billion)
Pharmaceuticals account for about 3.6% of Australian imports. The importation of items such as medicines and medical devices is heavily regulated, and many pharmaceuticals are prohibited from entering into Australian borders by the Department of Health and Australian Border Force.
Recently, the import of medical cannabis has become a topic of much discussion. In 2019, the Department of Health permitted the bulk import of medicinal cannabis by licenced manufacturers approved by the Therapeutic Goods Association (TGA). There are also range of regulations that detail when consumers can import cannabis that you can find on the TGA’s website.
#7 Gems and precious metals (AUD$9.5 billion)
Representing around 2.9% of Australian imports, gems and precious stones are at #7 on the list. Australians love their jewellery and this plays a critically important role in international trade. Diamonds alone generated about AUD$624 million in value whilst jewellery altogether formed about AUD$1.4 billion in import value.
Of particular note in the 21st century is the importation of ‘conflict diamonds’, which are diamonds generally sold by rebel movements in foreign countries to finance armed conflict against established governments. Australian governments continue to crack down on this illicit trade whilst supporting genuine diamond imports.
#8 Plastics and plastic articles ($AUD9.2 billion)
Plastic is a large international business, and it accounted for about 2.8% of Australian imports in 2018.
The imports of plastic tableware and toiletry alone rose by 5.7% in 2018 to about $706 million in value. Plastic plates, sheets and tape also rose to account for about $1 billion in import value.
#9 Iron or steel articles (AUD$7.2 billion)
Coming in at number nine are iron and steel articles, accounting for around 2.2 per cent of Australian imports in 2018. This was a significant increase from the previous year.
In 2016, the Federal Government placed import duties on Chinese steel in an attempt to assist local Australian steel producers, following recommendations from the Anti-Dumping Commission.
However, such tariffs may soon be found unlawful by the World Trade Organisation, who in December 2019 found that Australia’s anti-dumping import duties on paper were in breach of WTO rules. Trade lawyer Russell Wisese commented that “It is unthinkable that China won’t use the decision to get an outcome from Australia on steel and aluminium.”
#10 Furniture, bedding and lighting (AUD$6.9 billion)
Last but not least, Australians continue to invest in home furnishings, explaining why the importation of furniture, bedding and lighting accounted for 2.1% of all imports. As the housing market is slowly recovering with the reduction in interest rates, we anticipate this sector will continue to grow.
Australia’s Top Ten Exports
As mentioned above, Australia is an export nation gaining most GDP growth from overseas trade. In 2018, the country exported around $387.8 billion worth of goods internationally, which was a gain of about 10.5%.
Below is a list of Australia’s top ten exports. As you’ll see, goods like coal and iron ore are the some of the most valuable products that we ship overseas.
#1 Mineral fuels (AUD$127.1 billion)
Australia is seeing increasing growth in the international trade of petroleum gas and coal, with mineral fuels forming 34.6% of total Australia exports.
Whilst Australia produces a significant amount of oil, we export a large portion (around 75%) of our crude production largely to Indonesia and Singapore. Some of the main players in the export of mineral fuels include Woodside Petroleum and Santos (oil and gas).
#2 Ores, slag and ash (AUD$86.3 billion)
Australia is one of world’s largest exporters of coal, iron ore, lead and diamonds, with ores forming around 23.5% of Australian exports. According to the Minerals Council of Australia, iron ore is the country’s largest source of export revenue. In 2017, the mineral was worth around $63 billion in exports.
The export is integral to Australia’s industry and played an especially important role during the mining boom in the 2000s and early 2010s. Some suggest we are currently enjoying a ‘Mining Boom 2.0’. The largest companies involved include BHP Billiton, Fortescue Metals Group and Orica.
#3 Gems and precious metals (AUD$23.2 billion)
Whilst Australians love their jewellery, our exports of gems and precious metals far outweigh those that we import.. In fact, precious metal exports account for around 6.3% of all Australian exports.
Australia’s landscape is rich in precious minerals, and industry has taken full advantage. We’re the largest producer of opals and diamonds, and a major supplier of jewels like topaz, emerald, ruby, jade and sapphire.
#4 Meat (AUD$14.7 billion)
Meat is a huge industry in Australia, valued at around $10.2 billion in exports. Australia has a rich history of exporting grass fed beef, lamb button as well as live cattle and sheep.
According to Meat and Livestock Australia, lamb export values were expected to peak in 2019 because of increased Chinese demand for Australian red meat. The industry association reported that from January to November 2019, lamb exports were up 5% from 2018.
#5 Inorganic chemicals (AUD$11.9 billion)
Australia’s chemical industry has expanded significantly in recent years, now accounting for around 3.2% of Australian exports.
#6 Cereals (AUD$7.1 billion)
Whilst we love our Weet Bix and Fruit Loops, cereal is a top export of Australia accounting for just under 2% of all exports. Wheat alone accounted for around $4.5 billion in Australian exports.
The grain industry in Western Australia plays an important part of this, as it’s the largest agricultural sector in the whole State. Wheat is the main crop, but the industry also produces barley, oats, canola and lupins.
#7 Machinery (AUD$6.9 billion)
Accounting for around 1.9% of Australian exports, machinery also makes the list. This not only includes computers but, interestingly, aircraft parts which we largely export to the United States. Aircraft parts alone accounted for around $2 billion of Australian exports.
Included in the mix were also phone system devices, which represented $1.4 billion of Australian exports.
#8 Aluminium (AUD$5.5 billion)
Aluminium represents around 1.5% of Australian exports. 2018 was a massive year for aluminium, which reportedly increased by almost 120%.
Earlier this year, United States President Donald Trump expressed concern with the Australian aluminium trade but Australia managed to avoid U.S. tariffs on steel and aluminium when they were imposed in 2019. However, U.S. officials have reportedly wanted the exemption on aluminium to be removed because exports of aluminium onto American shores from Australia grew much more than originally expected.
#9 Electrical machinery and equipment (AUD$4.6 billion) AND
#10 Optical and medical equipment (AUD$4.6 billion)
Tying for #9 is electrical, optical and medical equipment which both account for 1.3% of Australian exports.
Australia’s Top Trading Partners for Imports and Exports
Australia is an important player in the international trade of goods and services as we have traded with dozens of overseas countries throughout the centuries.
Below you’ll see a list of our five most important trading countries, calculated by those countries that imported the most Australian shipments by dollar value during the year 2018.
Coming in as no surprise at number one is China, who has consistently and by far been our most important trading partner for many years. Importing nearly $107 billion worth of Aussie goods in 2018, they account for almost 30% of all our exports.
Since China became embroiled in a trade war with the United States, our Asian neighbour will likely become more economically reliant on Australia, especially for energy and mineral exports. The Australia-China economic relationship is only getting stronger after the two countries signed the China-Australia Free Trade Agreement (ChAFTA) which entered into force in December 2015. Australia supplied China with nearly half of its liquid natural gas (LNG) in 2018-2019, more than any other nation. Companies Sinopec, PetroChina and CNOOC purchased over 35% of LNG exports from Australia.
Demand for iron ore from China has also escalated significantly, with Australia supplying nearly 74% of the country’s iron ore in 2018-2019 (a figure which has doubled in a decade). China further relies on Australian coal and uranium for its lighting and its own economy, predominantly manufacturing.
At the same time, Australia’s economy largely relies on China. A report from PriceWaterCoopers released in August 2019 called China Matters said that if China’s economic relationship with Australia waded, it could cost Australia half a million jobs and around $140 billion.
Coming in at second place is Japan, which imported around $37.8 billion worth of Australian exports in 2018 (around 10.3% of Australian exports). Japan is vital to Australia’s economic and strategic interests and has been a close major trading partner since after the Second World War with the ratification of the 1957 Commence Agreement.
Japan relies on Australia for its minerals, food and energy, whilst it is also one of the most important sources of investment for the Australian economy. In 2017, we exported nearly 14.9% of all our goods to Japan and largely sent over coal, LNG, iron ore, beef and copper ores. Simultaneously, Australia largely relies on Japan for goods such as passenger vehicles, gold and refined petroleum.
The Australia-Japan economic relationship grew closer with the signing of the Japan-Australia Economic Partnership Agreement (JAEPA), which came into effect on 15 January 2015. This allows for Australian exporters to access a greater share of the Japanese market and unlocks further opportunities for trade and investment into the future.
#3 South Korea
The economies of Australia and South Korea are closely interdependent, with South Korea importing nearly AUD$19.6 billion worth of goods from Australia (around 5.4% of exports). Australia provides South Korea with a large amount of food, raw materials and manufactured goods. South Korea at the same time provides Australia with cars, computers and other machinery.
From 2016 to 2018, the value of trade between the two countries increased largely because of Australia’s Inpex Ichthys and Prelude LNG Projects, which largely relied on the imports of LNG floating platforms from South Korea. Trade and investment have also been boosted by the Korea-Australia Free Trade Agreement (KAFTA), a comprehensive free trade agreement that has allowed for the removals of tariffs and greater access in into the South Korean market for Australian business.
India is the world’s sixth largest economy and our fourth largest trading partner, importing over $14.5 billion worth of Australian goods. Two-way trade also exceeded $30 billion in 2018. Recently, India’s focus has largely been an investment in infrastructure with the construction of new highways, cities, railways, airports and water projects. It therefore continues to rely on Australian agriculture, education, tourism, energy and financial services.
Whilst Australia has no free trade agreement with India (the countries having shelved negotiations for the Australia-India Comprehensive Economic Cooperation Agreement), Australia recently implemented its India Economic Strategy to 2035 which recognises the importance of the Australian economy to India’s growth.
The strategy recommends important courses of action such as increased direct air services between the two countries, the creation of an Australian consortium of universities to include India’s proposed technology institutes and the establishment of an Australia-India Infrastructure Council.
#5 United States
The United States is also integral to Australia’s economic growth, with the U.S importing nearly $13.2 worth of Aussie imports in 2018 (accounting for about 3.6% of Australian exports). The U.S. is Australia’s most important investor, representing around 27% of Australia’s foreign investment as of December 2018.
Our economic relationship is founded on the Australia-United States Free Trade Agreement (AUSFTA). Since this agreement came into effect in January 2005, exports of American goods into Australia increased by over 91%. We are the largest exporter of beef to the United States, whilst we also export products like aircraft and pharmaceutical products. American trade with Australia underpins about 300,000 U.S. jobs
The Future for International Trade
The above list captures a snapshot of Australia’s current international trading environment. 2020 is set to be a big year as Australia seeks further opportunities in growing Asian markets that are becoming increasingly reliant on Australian minerals and energy.
We at ICE Cargo can help you take advantage of the free trade agreements Australia has to offer and the other numerous opportunities in overseas markets. Feel free to contact ICE Cargo and our international trade specialists for further insight.