Qatar has cancelled a $300 million annual trade subsidy for the Australian lamb industry after the country condemned a series of invasive medical examinations of its nationals in Doha in October.
The deal was due to end in 2023, but the Qatari government has made the decision to finish the subsidy early, on 31 December this year.
Stephen Crisp, the chief executive officer at Sheep Producers Australia, told the Guardian the sudden decision has come as a surprise for the industry, which is also grappling with Chinese import bans.
"It was a surprise. I don't think we were ready for this. But we're fortunate to be in a very adaptable industry. We service many, many countries, so we can adapt," Crisp was quoted by the Guardian as saying.
Industry insiders cited by the British newspaper said they were unwilling to link the decision to end the subsidy early to the diplomatic row sparked by the airport search debacle.
The row started after 13 Australian women were removed from a Qatar Airways flight in October and subjected to an invasive medical examination to determine whether any of them had recently given birth.
The searches, which delayed the women's flight by four hours, were carried out after a newborn baby was found abandoned in a toilet in Hamad International Airport in Doha.
Neither the Qatari government or the airline have apologised to the women over the incident, over which the Australian government "registered its strong disapproval and outrage".
However, police officers involved in the medical examinations have been charged and could face prison sentences.
However, Crisp told the Guardian, the decision to end the subsidy was likely sparked by a Qatari desire to end increased competition and move towards self-sufficiency.
"It's a subsidy that we've enjoyed. But we can compete on a level playing field. It's going to be harder, but I think our premium product should still attract a market in Qatar," Crisp said.
Adding: "It's an important market for certain abattoirs that were geared towards that market. It's not a massive volume, but it's an important market. But, we don't' like to see any diminishing of our competitiveness in any market around the world."
Meanwhile, Minister for Trade Simon Birmingham noted in an interview with the Australian Financial Review that exports of lamb to Qatar had not been banned but would face harsher competition.