Live Export

Chinese delegation visits Australia to discuss live exports

Terry Sim, 31/10/2014

Negotiations around a live feeder and slaughter cattle trade to China are believed to be at a positive stage, following a recent visit to Australia by a Chinese Government delegation.

Australian live exporters are also hopeful any future trade to China will be encompassed by a Free Trade Agreement with the country.

Australia’s Department of Foreign Affairs and Trade said this week that China FTA negotiations were at “an intense stage”.

A Chinese Government delegation left Australia on Friday after the latest round of discussions on a bluetongue disease protocol which is vital to a live slaughter/feeder trade proceeding.

Beef Central believes discussions with the Chinese delegation closed this week on a positive note, but there was no formal confirmation of any agreement on technical issues or elements of a potential trade agreement.

Australian Livestock Exporter’s Council (ALEC) chief executive officer Alison Penfold said exporters were seeking access to China for feeder and slaughter cattle from all areas in Australia, including the northern bluetongue surveillance and possible transmission zones.

Australian government and industry representative negotiations with the Chinese delegation revolved around technical and bluetongue protocol issues, and access, she said.

“They need and want our livestock – they’ve made that clear,” Ms Penfold said, but she would not confirm whether any agreement had been reached.

Austrex managing director Justin Slaughter said he believed the Australian live export industry should look for an agreement with China on live export tariffs for non-breeding cattle that was sensible and at least equal or better than what New Zealand had achieved in its FTA with China.

Australian exporters currently pay a 24.3 percent tariff on non-breeding cattle into China, while New Zealand has been able to negotiate a tariff of about 13 pc with China as part of an FTA.

Mr Slaughter said the Chinese delegation’s visit had been positive for Australia and China, “and they are progressing hopefully towards something happening in the not too distant future.”

Elders International Trading general manager Cameron Hall said the Chinese delegation had toured Victoria, the Northern Territory, Western Australia and Queensland in the past two weeks looking at beef cattle production, certification and animal health systems.

Without agreement on a bluetongue disease protocol, a live beef slaughter-feeder cattle trade with China would never start, he said.

Mr Slaughter told the 2014 Livex conference in Melbourne there were still some significant challenges around executing a bluetongue protocol with China.

“With regard to access to this market there are two main things:

“We have to get a workable health protocol that I believe provides maximum access to all of Australia.”

The other critical aspect was negotiating a reduction in the current non-breeding cattle tariff with China.

Traditionally, China has been concerned about bluetongue disease and always sourced breeding cattle from Australia’s bluetongue-free zones, he said.

Although Australia had no clinical bluetongue, Mr Slaughter said about 65pc of its beef herd was probably in the bluetongue surveillance and possible transmission zones, in northern areas.

“So the critical aspect of these negotiations is to provide access to as many cattle as possible, and I think that gives the most possible opportunities for all producers to access that market.”

“I believe there is opportunity to supply both Indonesia and China – I don’t think it is one or the other,” he said.

“For our industry, for the wider producer sector, it is about risk management, and having as many options as possible is critical to achieving that.

“We definitely should be opening the market and working with the Chinese the best we can, but that does not take away from the fact that Indonesia is a very, very important market to us and we will always be committed to that market as well.”

Mr Hall said Indonesia would always be a very important market to Australia, but the critical driver around the range of meat and live export markets available was risk management.

The more markets available from a production, processing and exporting sense, the more opportunities would be presented to producers able to increase production with the correct market signals, he said.

“There is clear evidence around the fact that the discussion around food security and food access that have gone on for 10 years is actually starting to come to fruition.

“We’ve seen in the past, big stockpiles of beef held in Korea and Japan – they are not there, and it’s the same around a whole range of other proteins around the world.

“So it is now a much more hand to mouth-type approach for our food access and security of food.”

Australian Farm Institute executive director Mick Keogh said he suspected the opening of a live slaughter-feeder cattle market for Australian cattle “in any volume” would have quite a significant impact on domestic cattle prices.

“I guess each of those market will have price points and they will be sensitive. Where those price points are, you would find out fairly quickly, I suspect.”

But he said Australia did not have an infinite supply of cattle, raising the broader question from an Australian agriculture perspective about the potential to increase the volume of production – be it in livestock numbers or grain or whatever – is limited to productivity growth.

“We are a bit like shopkeeper that has only got so much shelf space and what we’ve got to try to do is find the products on those shelves that get the best margin for us,” Mr Keogh said.

“I think we won’t be a volume supplier if a big market opens up, what we will probably have to try to do is find those markets where there is a bit of a margin for us that makes it viable, and that’s where we are going to be.

“We are not going to be the big volume supplier if China really got serious for example, and that will be the challenge.”

Chief representative for the Chinese-owned RIFA Australia, Daney Xu, said overseas media reports indicated a Chinese slaughter-feeder cattle trade might not open until next year. His company had invested in land inwestern Victoria and was interested in supplying China with slaughter-feeder cattle if the trade opened. Mr Xu said he had been hoping for a decision on the trade this year.

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