Live Export

Export ships set sail as cattle supply shrinks

James Nason, 19/08/2016
Screen Shot 2016-08-19 at 1.00.17 pm

Darwin feeder steer prices.

Livestock ships are leaving Australia to find work in other parts of the world as the supply of export cattle dries up.

The tightening supply of cattle was highlighted in the latest edition of Meat & Livestock Australia’s monthly LiveLink report, which revealed a 21 percent year-on-year decline in live feeder and slaughter cattle exports for the January to July period.

Exports for the period totalled 628,635 head, down from 800,000 exported in the first six months of 2015.

Shipments to Indonesia were down by 15pc to 345,513 head. Exports to Vietnam fell by 46pc to 138,300 head.

The big improver for the period was the number of southern breeding cattle shipped to China – a 64 percent rise to just over 45,200 head.

In northern Australia exporters are finding it harder to source the numbers they need to fill orders for Indonesia and Vietnam.

Prices have been gradually lifting as they attempt to lure more stock out of the woodwork.

Live export steer prices in Darwin are now being quoted at around 350c/kg, up from 285c/kg just over three months ago in early May.

A number of exporters who have had ships on fixed charters are reportedly not renewing those lease agreements as they are coming back up for renewal.

Sources within the live shipping trade, who asked not to be directly quoted, confirmed that with difficulties sourcing required numbers, and the impact of high cattle prices on their margins, some exporters were redelivering vessels that had been time chartered.

Instead they are moving to voyage charter tonnage when it makes financial sense to conclude a trade.

“The lack of cattle supply is impacting on vessel employment and for this reason ship owners are looking at repositioning their vessels to markets outside of Australia,” one shipping trade source said.

Further pressure on supply will come with the new allocation of permits for the final trimester of the year, which starts in less than two weeks on September 1.

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Comments

  1. Lee Clarke, 19/08/2016

    About as predictable as picking the Wellard IPO as the great short of the year. Another reason why Australian Fund Managers are terrible investors in Agri. The are not wired to take the long term time horizon required and the risk is a good torching they would have taken by investing in an overhyped business like Wellard.This unfortunately will make them think twice about the whole sector and a could bring on the who Institutional herd to move out of the whole sector even quicker than they they come in.

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