Warwick business crippled after exports to China stop
THE Warwick wool and skin industry has been crippled by ongoing drought, wild dogs and now, increasing trade tensions with China.
Rose City Wool and Skins was dealt a crushing blow when its Chinese exports came to a sudden halt this year.
Owner Tony Gilchrist said the loss accounted for close to 70 per cent of his annual revenue.
"Usually I'd be up at 6am, taking raw skins from Carey Brothers Abattoirs, packing them up and sending them to China," Mr Gilchrist said.
"But lately, that's just not happening.
"I'm not selling anything."
Mr Gilchrist blames low demand for his products, stating he witnessed a similar drop in exports to Russia some years ago.
"The Chinese just aren't interested in buying skins at the moment," he said.
The China-Australia Free Trade Agreement (CHAFTA) eliminated tariffs of up to 14 per cent on Australian hides and skins between 2017 and 2022.
The agreement ensured hides and skins became a crucial agricultural export to China, boosting the economy by $722 million and accounting for over 75 per cent of Australia's total hide and skin exports during its first year.
Since then, however, China increased its own output of hides and skins by 3 per cent each year, on average, while at the same time average annual growth rate in terms of value from Australia dropped by 4 per cent, indicating greater reliance on local suppliers.
It's a double whammy of bad news for Mr Gilchrist, who relied on buying wool from farmers for the remaining 30 per cent of his revenue.
"The wool is quiet because of the drought and the dogs," he said.
"All the farmers are shifting to a meat breed, so now there's a shortage.
"The wool market is collapsing."
Over the winter months, Mr Gilchrist turned his attention away from his export business and towards his local venture, Rosewool Uggs and Ruggs, which sells tanned products in a retail store on Palmerin St.
"Really, I've got no choice," he said.