Ag boost: Three new trade delegates representing wool, wine and summerfruit set to be positioned in Vietnam

Three new trade delegates representing Australia’s wool, wine and summerfruit industries will be stationed in Vietnam within months through a Federal Government-funded program designed to strengthen trade ties.

WoolProducers Australia, Wine Australia and Summerfruit Australia secured funding for in-country representatives through AusHub Vietnam, a partnership between the Australian Chamber of Commerce Vietnam and the Department of Foreign Affairs and Trade.

The announcement comes as Australia and Vietnam celebrate 50 years of diplomatic ties this year, with the Federal Government eyeing Vietnam’s strong growth prospects and the wool industry eyeing it as a new market for Australian wool.

WoolProducers Australia chief executive Jo Hall said the in-country representative would help identifying pathways to expand trade opportunities for Australian wool to Vietnam with imports of carded and combed wool growing in recent years.

Vietnam has strong economic growth prospects with a forecast 7 per cent growth in GDP in the coming year, and WoolProducers hopes the representative will work closely with Australian Wool Innovation’s efforts to boost its presence there too.

Ms Hall said the Vietnam had a growing textile sector, with a major global wool spinning operation setting up shop in recent years.

She pointed to a report by Deloitte Access Economics in November 2022, called “Ensuring a sustainable future for Australia’s wool supply chain”, which identified Vietnam as a country worthy of further assessment for the establishment of early-stage wool processing and an avenue for market expansion.

“This, combined with the outlook for economic growth in Vietnam, particularly within their textile sector, presents an ideal opportunity for both countries,” Ms Hall said.

“While market development activities have taken place in Vietnam in the past, the partnership with AusHub is seeking to identify strategic opportunities for new and vastly expanded early and intermediate-stage wool processing.”

WoolProducers board member Steve McGuire, also WAFarmers vice president and farms at Kojonup, said the representative would be a short term position, funded to the amount of about $65,000 through AusHub.

Because it’s a pilot program there would not be a need for an industry contribution to the role, however WPA and AWI/ Woolmark resources would be working closely with the AusHub role - which will provide a significant industry in-kind contribution to the initiative.

“This was a deal that came from their end,” Mr McGuire said.

“Vietnam put this up — they see the need which is really good.

“And it’s obvious to us because of the need to diversify away from China.”

He said because of issues in and around China, including animal disease events, trade disruptions and geopolitical tensions, it was important for the Australian wool industry to look for alternative processing arrangements.

The wool industry is eyeing other alternative markets including India, Indonesia, Bangladesh and Vietnam.

Mr McGuire said WoolProducers was also looking at processing the wool in Australia because by the time it was shipped to China and processed, and then sent on to the manufacturing plants in other countries, it cost about the same to process in Australia.

The DAE report said it would cost $1.1 billion to set up early stage wool processing in Australia, including the construction of six to 14 plants, which when completed would be internationally cost competitive, but set up however would be “commercially unappealing”.

The report found that expanding early-stage processing capacity in Australia to process 170 million kg a year could add up to $1.3b to wool industry output and $1.8b in GDP for Australia each year, which would be in addition to any risk reduction.

It could also see a further 600 jobs in the local industry.

Mr McGuire said WoolProducers was the early stages of identifying and understanding opportunities and challenges in new markets.