Economic Benefit Cost Analysis of Live Camel Exports

Summary

This document is an analysis of the economics of live camel export. It describes the live export supply chain; provides an assessment of the suitability of the current Cattle and Buffalo ESCAS checklist for the live export of slaughter camels; and includes an economic benefit cost analysis of Australian live camel supply. 

The world trade in live camels is relatively stable at between 200,000 and 300,000 head per annum. Average prices are around US$400/head. The trade tends to be between Middle East and North African countries. Australia's cost of supply is estimated to be between US$1,000 and US$1,500/head. 

Opportunities for Australian export are in small volume higher value niches breeding stock in the Middle East (approximate sales of 150 head per annum) and slaughter stock in Malaysia where Australia has an advantage in relative proximity and a professional approach to supply (approximate sales of 150 head per annum). Other potential markets, including the US milking sector, may account for a further 50 head per annum if an appropriate supply chain can be established. Live export of Australian camels is a limited opportunity of around 350 head per annum at current supply costs. 

The current Cattle and Buffalo ESCAS checklist is relevant to the live export of slaughter camels. The Cattle and Buffalo ESCAS checklist requires few changes or additions. Some R&D will be required to confirm metrics relevant to camels and Quality Management manuals will be required. Ensuring there are appropriate importing country disembarkation feedlots, lairage and slaughter facilities for camels may be an additional cost associated with ESCAS compliance. ESCAS training, supply chain monitoring and audit are all additional costs for camel exporters. In addition to ESCAS compliance costs for exporters, resources will be expended by government finalising ESCAS guidelines and negotiating health protocols and potentially MoUs with countries intending to import Australian camels. There is also an opportunity cost associated with negotiating Market compliance for camels at the expense of other red meat and livestock priorities. 

Benefit-cost analysis of Australian live camel supply incorporating ESCAS requirements reveals a total industry present value benefit of $1.57 million from industry and government investment of present value $0.41 million resulting in a positive net present value of $1.16 million over the twenty-year period to 2033. While the benefit-cost ratio (3.82) is acceptable overall returns are modest. 

Investment in the development of a live camel export industry may also generate spillover benefits including employment for Aboriginal people living in remote communities and potentially, a minor reduction in environmental degradation caused by wild camels. Spillover benefits have not been quantified in the economic benefit-cost analysis. 

Risks associated with live camel trade establishment include animal welfare issues that are both real and perceived by activists; irregular supply of wild camels; the need to establish a market for camels that are not suitable for live export; and a diversion of resources away from other industry priorities. 
 On balance, modest economic returns and substantial risks limit the attractiveness of investment in Australian live camel exports.