Global Wrap 2018
01 March 2018
The year has begun with some significant news for Australia’s red meat and livestock industry around trade and market access, with the announcement that an agreement has been reached by 11 parties to sign a revised Trans-Pacific Partnership (TPP) deal in Chile in March. The deal, to be known as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), follows the Australian Government concluding a Free Trade Agreement (FTA) with Peru.
These market access gains will continue to benefit our industry with ongoing reductions in key tariff lines occurring in key markets. Importantly, it will complement the gains derived from the other free trade agreements Australia has concluded to date.
The text of the CPTPP agreement is now undergoing a legal review and government officials from each nation have recommended to their Ministers that the agreement be signed on 8 March 2018, in Chile. Once the agreement is signed, each signatory will undertake domestic treaty processes for ratification to enable the agreement to enter into force.
The CPTPP will enter into force when at least half of the signatories have completed their domestic ratification processes. In line with Australia’s treaty-making processes, once signed, the text of the agreement will be tabled in the Australian Parliament. The Joint Standing Committee on Treaties (JSCOT) would then conduct an inquiry and report and the Australian Parliament would consider any legislation or amendments to existing legislation that may be necessary to implement the agreement.
In other good news for our industry, the Mexican Government has extended until 31 Dec 2019 the temporary exempt tariff-quota measure applicable to Australian beef imports. This will give confidence to exporters looking to start business to Mexico that they can build their trade relationships and business.
With the ongoing competitive pressures in key markets these ongoing market access gains are key to the success and future prosperity of the Australian red meat industry. MLA’s cattle and sheep industry projections released recently indicated some of the pressures that are being faced. Cattle supplies are anticipated to remain tight in 2018 with only a small rise forecast in adult slaughter to 7.4 million head, as the herd rebuild continues.
Exports update
It is shaping up to be a challenging year ahead for Australian beef exports, with expected increases in production and exports from many of our major competitors, including the US and Brazil. Australia's boxed beef exports are still predicted to edge above one million tonnes shipped weight (swt) following the forecasted growth in production, which will be larger than any year prior to 2013, as many strong international demand fundamentals remain in place.
For sheepmeat it is expected that both lamb and mutton exports will continue to follow domestic production shifts. Exports are likely to plateau in 2018 before building up again in coming years. The increase in both sheepmeat production and prices in 2017 highlights the strength of the market. Current market signals are showing no significant change to international demand in 2018 and with the anticipated softer overall sheepmeat production, this year should see continued support for prices.
Global Markets Forum
MLA is gearing up another for a busy year of engagement with industry. MLA will be running its beef Global Markets Forum for the first time at Beef Australia in Rockhampton on the 9th May. The forums bring our international team of in-market experts together from around the globe with other special guest speakers to discuss how we’re growing demand for Australian beef in over 100 markets around the world. Participants will gain detailed insights into the challenges and opportunities the industry faces in our key markets and how MLA’s strategies are building global competiveness to deliver producer profitability.
Similarly, the trade show agenda has kicked off for 2018 with Gulf Food completed (18th – 22nd Feb), Food and Hotel Asia kicking off on 24-27th April followed by SIAL Shanghai on the 16-19th May. There is a strong Australian presence for each of these shows already booked. Trade shows are an important business development activity that enables our industry to increase the awareness and penetration of Australia’s quality red meat products. MLA plays a key role in co-ordinating exporters to attend these shows, ultimately ensuring the Australian industry presents a united front promoting the key attributes of the True Aussie brand. International trade shows are consistently held around the globe throughout the year, an if you wish to get involved with any upcoming trade shows please get in early and register your interest at MLA 2018-19 International Trade Shows Survey.
More information
Email Michael Finucan
MLA General Manager, International Markets
