by Agrimoney.com
Shares in Australian forestry group Gunns took losses in two days to 17%, as the country's reliance for agricultural trade on earthquake-devastated Japan for agricultural trade.
Gunns said it had not been a "significant" supplier of wood products to mills runs by Nippon Paper Industry which are believed to have been particularly affected by Japan's earthquake and tsunami.
Indeed, Gunns sales commitments to Japan "are predominantly to mills located outside of the directly affected region", the Tasmanian-based group said.
Nonetheless, with a warning that other Japanese paper mills were "undertaking plant assessments prior to recommencing production", the statement provided only partial reassurance to investors, who sent shares in Gunns a further 5.1% lower on Tuesday to Aus$0.465, their lowest close in nine months.
Australia-Japan ties
The fall came as Luke Mathews at Commonwealth Bank of Australia highlighted Japan's status as the top buyer of Australian agricultural products, with its imports averaging Aus$4.8bn a year, or 19% of the total, according to official statistics.
Japan the top importer of Australian beef, cheese, cottonseed, fish and sorghum, and the second-biggest buyer of barley, canola and wheat.
"Japan's relevance for the Australian agricultural market is more pronounced than their importance for global agriculture markets," Mr Mathews said.
"Because of this export reliance, an unexpected downturn in the Japanese economy could place pressure on the Australian agriculture industry."
Food uptick?
Nonetheless, values of many agricultural products proved relatively resilient, with east coast Australian wheat futures shedding 4% to Aus$288.50 a tonne, for the most-traded January 2012 lot, since the earthquake struck Japan.
Indeed, some analysts have identified a potential uptick from Japan's distaster to the country's demand for foreign food.
Shares in Australian Agricultural Company, which last month highlighted the 30% jump in its wagyu beef cattle herd aimed at the Japanese market, have fallen 4.2% over the two days, not far beyond the average drop of 2.5% in Sydney-listed stocks.
GrainCorp, the grain handler, saw a sharp slide in its shares reverse, to leave them down only 1.3% this week.
Stock in agrichemicals group Nufarm, which counts Japan's Sumitomo Chemical as a significant shareholder and trading partner, has fallen by 4.1%.
Nufarm and Sumitomo on Tuesday unveiled a formula-swapping agreement "to develop new and innovative crop protection solutions".
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