August cattle exports hit 20-month high

19 September 2018

Cattle exports in August brought the year-to-date total 24% above year-ago volumes. Here Prices & Markets outlines key findings from the latest LiveLink report.

Cattle

August cattle exports were just under 108,000 head, bringing the year-to-date total to 680,000 head, 24% above year-ago volumes – as highlighted in the latest edition of LiveLink.

The August exports represented the largest monthly shipment this calendar year, supported by the commencement of second-round musters across northern Australia and the ongoing drought conditions in Queensland. Monthly exports out of Townsville also hit a three-year high in August.   

Indonesia

Year-to-August shipments to Indonesia were up 8% at 360,000 head, underpinned by feeder cattle. Exports to Indonesia were supported by feedlots re-stocking post the high consumption periods of Ramadan (16 May – 14 June) and Eid-al-Adha (21 August).

Live cattle exports to Indonesia look set to benefit from the conclusion of Indonesia–Australia Comprehensive Economic Partnership Agreement negotiations. A quota of 575,000 head of (male) cattle featured in the agreement (with a 0% in-quota tariff), which will grow by 4% a year over five years. Furthermore, industry will benefit with the shift to a more market oriented import regime, with permits to be issued automatically and on an annual basis.

A government audit (due December 2018) is scheduled to review the implementation of the 5:1 feeder-breeder policy. However, the outcome looks uncertain, given breeder exports are well short of the required number, with only 5,500 breeders shipped so far this year. A proposed revision to the breeder policy has been put forward to the government.

Other markets

Exports of feeder and slaughter cattle to Vietnam for the calendar year-to-August totaled 132,000 head, up 15% year-on-year. Monthly exports are anticipated to remain consistent through to the end of 2018, to finish the year just below 200,000 head.

Opportunistic buying resulted in a lift in exports to Malaysia and the Philippines for the calendar year-to-August, as importers take advantage of lower cattle prices – albeit volumes have increased off a low base the year prior.

Almost three years since initial health protocols were signed, and following a string of early air shipments, the slaughter cattle trade to China has developed into a more regular sea-freight business. However, exports to China in August were driven by a large breeder consignment out of Portland. China is the third largest cattle export destination for Australian cattle (and now second for slaughter cattle) and exports for the first eight months of the year increased 57% to 70,500 head.

Sheep

The northern hemisphere summer hiatus for Australian sheep exports continued in August, with just an air consignment to Singapore, totaling under 4,000 head and timed for the Korban festival.

Sheep exports to the Gulf region are likely to re-commence in October, however no further shipments are anticipated to Turkey given the economic turmoil and currency crisis making the trade unviable for importers.

In the absence of Australian sheep exports, the Gulf countries are sourcing stock from a range of other suppliers. Qatar and Kuwait are reported to be sourcing sheep from Somalia, Sudan and Armenia, while Romanian sheep have supported the shortfall in Jordan and Israel has been procuring sheep from Portugal.

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