Beef Export Market Shifts Beneath Australian Feet
AUSTRALIA - Australian beef exporters are having to adjust to a rapidly changing trading environment, caused by the imminent return of US product to Korea, an easing in competition from South America, rising prices in the US and the high Australian dollar.
21 May 2008
2 minute read
So far this year there has been a significant shift in beef exports from the big three of Japan, the US and Korea to ‘second tier’ markets in Europe, South East Asia/China’s and the Middle East, according to Meat and Livestock Australia.
Calendar year shipments to Russia until 12 May 2008 totalled almost 20,000 tonnes swt, compared with 5,000 tonnes for the whole of 2007. Over the January to April period, exports to South East Asia also rose 75 per cent on 2007, China/Hong Kong by 50 per cent, the Middle East by almost 200 per cent and the EU by 150 per cent.
Common factors in this growth have been a sharp easing in competition from Brazilian and Argentinean beef and, in most cases, strong local demand growth. Subdued demand from Japan, Korea and the US, and a rising A$ against the currencies of these countries, have also contributed to the shift in Australia’s export focus.
MLA said the US return to Korea is likely to cause a further period of market disruption until local Korean protests and US offer quantities and prices settle. This is likely to significantly reduce Australian beef sales and prices to Korea over coming months.
Together with increasing supplies of grassfed beef in Australia, this is likely to lead to continued high shipments to the second tier markets. The current sharp rise in US beef import offer prices is also expected to initiate some recovery in exports to this market over coming months, despite the continued low US$. However, exports to Russia are not expected to maintain the current frantic pace, as reportedly the market is having trouble absorbing the recent large (and high priced) imports, MLA added.
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