The impact of recent South American free trade agreements on Australian agriculture

South America is becoming a major competitor for Australian agricultural products in Asian markets. The signing of 45 free trade agreements (FTAs) between South American and Asian markets over the past 10 years is increasing competition. At least 35 more agreements are under negotiation.

Other factors include improved market access for South American products, increased agricultural production in South America and growing demand for imported food in Asia.

In 2021–22, Chile and Peru accounted for approximately 6% of global table grape production and 31% of global exports (Source: USDA 2022). Australia and South America are in the same hemisphere. This means horticulture products tend to ripen at the same time.

Chilean table grape production and exports have declined in recent years. Conversely, Peruvian production and exports have increased. If current trends continue, Peru will overtake Chile as the world’s largest exporter of table grapes (see figure below). This change reflects:

ongoing dry conditions in Chile
lower production costs
improved farming techniques in Peru
improved market access for Peruvian fruit (to a lesser extent).

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