Vineyards nationwide have enough wine in domestic storage to fill 859 Olympic swimming pools, Rabobank said this week in its third-quarter wine report.

“That’s over two billion litres of wine, or over 2.8 billion bottles,” said RaboResearch analyst Pia Piggott, adding that the inventory was depressing prices, particularly for commercial red wines.

Ties with biggest trading partner China deteriorated in 2020 after Australia called for an inquiry into the origins of COVID, triggering reprisals by Beijing, such as anti-dumping duties on Australian wine and barley.

The curbs battered the wine industry, with exports to China shrinking to just A$8.1 million (C$7 million) in the year to June, from a peak of A$1.2 billion for the year to January 2020, when the pandemic began to take hold.

“No other market can quickly compensate for the China market,” said Lee McLean, chief executive of industry body Australian Grape and Wine, thanks to Chinese drinkers’ obsession with red wine.

Diversification into markets such as Britain, Europe, the U.S. and elsewhere in Asia would take time to yield results, McLean added.

China, traditionally an avid purchaser of Australian commodities, including iron ore, resumed buying coal and timber this year after tension between the two has eased since the centre-left Labor party won power in Australia last year.

The recent removal of tariffs on Australian barley has fed hopes for an early easing of the five-year tariffs China imposed on Australian wine in 2021.

But even if the tariffs are lifted this year and Chinese wine consumption recovers, Australia’s wine industry will take at least two years to work through the surplus, Piggott said, as the curbs had coincided with an exceptional growing season.

“This coincided with COVID, logistics bottlenecks and inflation, which were major hurdles in the way of plans to grow and diversify exports,” she added.

“Thus, two-plus years into the tariff, prices of Australian commercial red grapes have significantly declined, and oversupply issues remain.”

Australian wine exports declined a tenth in value to A$1.87 billion and one per cent in volume to 621 million litres in the year ended June, Wine Australia’s Export Report said in July.

This week, Australia’s Treasury Wine Estate, the world’s biggest standalone winemaker, reported a drop in its profits, hurt by lower sales.

Wine sales will not return to the same level for the company even if the high tariffs are dropped, its chief executive said in May.

The crisis has made quality red wines more affordable for Australian domestic consumers, however.

“All we can say is next time you go to buy a bottle of wine, make sure it’s Australian,” McLean said.

— Praveen Menon is a Reuters correspondent in Sydney.

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The ministers from the 21 Asia Pacific Economic Cooperation (APEC) countries said in a communique issued after a virtual meeting there was wide divergence in recovery across and within economies, with downside risks remaining.

“We need to sustain our economic recovery through continued policy support measures, while preserving financial stability and long-term fiscal sustainability,” the ministers said.

They also said they would facilitate trade in a broader range of medical supplies to fight COVID-19 and voluntarily work to reduce the cost of vaccines and related goods. They pledged to support WTO negotiations on a temporary waiver of intellectual property protections on COVID-19 vaccines.

The ministers’ meeting is part of a week-long series of APEC conferences culminating in a summit on Friday into Saturday, hosted entirely online by New Zealand, a country with hardline pandemic control measures that has kept its borders closed to almost all travellers for 18 months.

While New Zealand has emphasized APEC support for boosting supply chains for critical medical supplies and efforts to decarbonize economies, tensions are expected over self-ruled Taiwan’s bid to join a regional trade pact in which China also seeks membership, and a U.S. bid to host the 2023 round of APEC meetings.

New Zealand’s Foreign Minister Nanaia Mahuta told reporters at a news conference in Wellington there was no agreement yet on which country would host APEC in 2023, despite an offer from the United States.

China and Taiwan’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was not a core part of the discussions, New Zealand’s Trade and Export Growth Minister Damien O’Connor said at the conference.

Taiwan’s has said it aims to use the APEC gathering to garner support for its bid to join CPTPP, while China, which has also applied to join the pact, opposes Taiwan’s membership.

“As a trade and economic forum all economies welcomed greater movement and reduction of trade barriers. CPTPP provides that but accession requests do mean that those applicants will have to look at standards required to ultimately become members and be accepted,” O’Connor said.

Opening travel

With many economies in the region dependent on tourism, the APEC ministers said they would work to ensure safe travel in the region, with “tangible outcomes in 2022.”

The trade-focused group said officials would work to foster a favourable trade and investment environment and “ensure our trade and investment environment is free, open, fair, non-discriminatory, transparent and predictable.”

The APEC ministers said they would engage at the WTO’s 12th ministerial meeting (MC12) at the end of November to modernize trade rules and deliver concrete results. They called for WTO countries to negotiate effective curbs on harmful fisheries subsidies at the meeting in Geneva.

As for agriculture, the ministers said, “despite its importance for ensuring global food security and sustainable economic development, agriculture is one of the most protected sectors in global trade.

“We recognize the need for a meaningful outcome on agriculture at MC12, reflecting our collective interests and sensitivities, with a view towards achieving substantial progressive reductions in support and protection,” in line with previous WTO mandates, the ministers said.

On climate-related issues, the ministers said they would try to accelerate efforts to rationalize and phase out “inefficient fossil fuel subsidies that encourage wasteful consumption,” a goal first agreed by APEC leaders in 2010.

Along with the U.S., China and Taiwan, APEC’s 21 member economies include Canada and its 10 fellow CPTPP countries, plus Russia, South Korea, Hong Kong, Indonesia, the Philippines, Thailand and Papua New Guinea.

— Reporting for Reuters by David Lawder and David Brunnstrom; additional reporting by Susan Heavey and Praveen Menon.

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A lone crew member from the Gulf Livestock 1 had been rescued so far. Three vessels, four airplanes and two divers were taking part in the search, the coastguard said.

The ship, with a cargo of nearly 6,000 cattle, sent a distress call from the west of Amami Oshima island in southwestern Japan on Wednesday as Typhoon Maysak lashed the area with strong winds and heavy seas.

Sareno Edvarodo, a 45-year-old chief officer from the Philippines, was rescued on Wednesday night, Japan’s coast guard said. By Thursday evening, he was still the only person rescued so far, a coast guard official said, adding the bodies of some cattle had been recovered.

The crew of 43 was made up of 39 people from the Philippines, two from New Zealand, and two from Australia, the coastguard said.

According to Edvarodo, the ship lost an engine before it was hit by a wave and capsized, a coastguard spokeswoman said.

When the ship capsized, crew were instructed to put on lifejackets. Edvarodo told the coastguard he jumped into the water and did not see any other crew members before he was rescued.

Pictures provided by the coast guard showed a person in a lifejacket being hauled from choppy seas in darkness.

The Philippines government said it was co-ordinating with the Japanese coast guard in the search.

Typhoon Maysak made landfall in South Korea on Thursday, bringing lashing winds, and at least two people were killed in the southern city of Busan. Another storm, Typhoon Haishen, was brewing south of Japan and is expected to hit the Korean coast on Sunday or Monday.

Live cattle export in spotlight

The Gulf Livestock 1 departed Napier in New Zealand on Aug. 14 with a cargo of 5,867 cattle bound for the Port of Jingtang in Tangshan, China. The journey was expected to take about 17 days, New Zealand foreign ministry officials told Reuters.

The 139-metre, Panamanian-flagged vessel was built in 2002. UAE-based Gulf Navigation issued a statement saying Gulf Livestock 1 was their vessel.

“Our hearts go out to those onboard and their families at this time,” a Gulf Navigation spokesman said. “We also express deep regret for the sad loss of the livestock on board. We are monitoring the situation closely and working closely with those involved in rescue efforts. We pray that there are other survivors.”

The young cows were exported by Australia-headquartered Australasian Global Exports, which specializes in live animal exports and owns quarantine facilities in China.

The cows were worth around 20,000 yuan (C$3,822) each, said a manager at AGE’s subsidiary Beijing Muhuayuan International Trade Co. Ltd.

New Zealand animal rights organization SAFE said the disaster showed the risks of the live animal export trade.

“These cows should never have been at sea,” said campaigns manager Marianne Macdonald.

“This is a real crisis, and our thoughts are with the families of the 43 crew who are missing with the ship. But questions remain, including why this trade is allowed to continue.”

China has imported more than 46,000 head of cattle from New Zealand so far this year, according to data from China’s customs, mostly to stock the country’s expanding dairy farms.

Last year, New Zealand launched a review of its live export trade, worth around NZ$54 million (C$47.7 million) in 2019, after thousands of animals being exported from New Zealand and Australia died in transit.

New Zealand’s Ministry for Primary Industries (MPI) said it had temporarily suspended live cattle export applications after the Gulf Livestock 1 went missing.

— Reporting for Reuters by Praveen Menon in Wellington and Junko Fujita in Tokyo; additional reporting by Gavin Maguire and Roslan Khasawneh in Singapore, Karen Lema in Manila and Dominique Patton and Beijing newsroom; writing by Lincoln Feast.

CORRECTION AND UPDATE, Sept. 3, 2020: This article updates previous versions published on this site and includes corrected information from Reuters regarding the ownership of the Gulf Livestock 1. Reuters on Sept. 3 also reported a second crewman from the vessel has died after being found unconscious in the East China Sea.

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