Australian cattle exporters have two weeks left to roll out animal-welfare based supply chain reforms in Turkey, the trade’s second largest market behind Indonesia.

With the February 29 deadline fast approaching, the indications are that there is still much work to do, and some delays to the trade are likely before necessary approvals are secured.

Under new supply chain reforms announced by the Federal Government in October last year, exporters have until February 29 to bring supply chains in Kuwait, Bahrain, Qatar and Turkey up to approved Export Supply Chain Assurance System (ESCAS) standards.

Australian livestock can only be exported to ESCAS-approved supply chains within those markets after that date.

Turkey is Australia’s second largest market for live cattle exports, taking 56,557 cattle in 2011, worth $45 million.

While simlar reforms have been successfully rolled-out in Indonesia, the application of the new requirements is not a simple or straight-forward process in Turkey, according to a range of industry sources.

Supply chains in the market can involve large numbers of geographically-dispersed feedlots and abattoirs, owned by mix of Government and private entities. Exporters have to secure the support of importers and the owners of each facility before they can implement the reforms.

The process also involves significant costs to install OIE-compliant restraint boxes and full traceability systems, in addition to training of staff in Australian Government approved slaughter practices.

While the cut-off for compulsory accreditation is still two weeks away, the February 29 deadline has effectively put the brakes on the trade for now in practical terms.

No exporter to the market has yet lodged a formal application to export livestock to Turkey departing on or after 1 March, the Department of Agriculture, Fisheries and Forestry confirmed to Beef Central this week.

Given that it could take up to four weeks from the time exporters submit supply chain assurance applications to the time they receive Government approval – which was the experience in Indonesia last July/August – exporters are already past the window of being able to supply Turkey until at least mid-March.

Asked how long it would take for exporters to receive Government approval after lodging their application, the department declined to nominate a period of time.

However a spokesperson said the department was “working very closely” with exporters to ensure all necessary documentation received was complete and met the requirement of the regulatory framework.

This ensured that when applications were lodged, they would be processed in the shortest possible time-frame.

The department added that the fact no exporter was yet in a position to lodge an ESCAS application was not an indication that consignments were not still being planned for departure to the market at the same time.

Much will hinge on how quickly exporters can get initial supply chains up and running. If it is a matter of weeks after the Feb 29 deadline, disruptions to the trade will be minimal. If it takes months, Australia may struggle to repeat the strong sales it achieved to the market in 2010 and 2011.

Dollar impact

The high Australian dollar is adding another source of complexity for Australian exporters in Turkey, as they strive to implement the necessary supply chain reforms without losing market share to foreign competitors.

Cattle Council of Australia president Andrew Ogilvie recently returned from a trade mission to the Middle East with federal agriculture minister Joe Ludwig.

While they did not visit Turkey first-hand, Mr Ogilvie said discussions with industry people directly involved in the market highlighted the competitive challenges Australian exporters are facing there.

Mr Ogilvie said the high $A was making it harder for Australian livestock to compete in the market against livestock from other sources.

As a result there was less incentive for Turkish importers to implement the supply chain reforms required to continue importing Australian livestock at this point.

“The dollar is really not forcing them to address the issues as they might if our cattle were more competitive,” Mr Ogilvie said.

A positive sign for the long-term future of the market has been the announced commitment by the Turkish Government to bring all abattoirs in the country up to OIE standards, in support its push to join the European Union.

This will gradually result in most abattoirs in the market achieving OIE and in turn ESCAS compliance, but obviously not in time for the February 29 ECAS deadline.

Despite the impact of the high Australian dollar, it is also worth noting that Australian exports to Turkey still held up very well in 2011, when the $A was strong for most of the year.

Australian cattle are highly regarded by Turkish importers, particularly for their clean health status, which had helped to offset the impact of the higher dollar on exports, export sources said.

Possible extension?

Asked if the federal Government would consider extensions to the February 29 deadline if exporters fail to meet it, agriculture minister Joe Ludwig provided the following response:  

"Both myself and my Department have just seen first-hand the progress that has already been made in the Middle East.

"Industry’s achievements so far are a testament to their commitment to working to the agreed timelines.

“There is still a lot of work to be done in the next month, but I am confident that industry is doing as much as they can to implement the new system in line with the February timeframe.

"We are going to work together until it is in place.”

A more detailed statement released by the minister on his return from the Middle East can be read here.

Australian exporters

The main exporters of Australian cattle to Turkey are Livestock Shipping Services, followed by Wellard Rural Exporters.

Livestock Shipping Services declined to comment on their progress in implementing the ESCAS in Turkey when approached by Beef Central, except to say that they were working hard to achieve the deadlines.

Wellard Rural Exports provided the following statement on its progress:  “Turkey remains a market that is looking at all of their options for supply of livestock, including Australia.

“Wellard has clients in Turkey who have compliant supply chains which far exceed the OIE standards required by the Exporter Supply Chain Assurance System.”

Australia supplies both feeder and slaughter cattle to Turkey sourced from southern Australia, in compliance with the market’s requirements that cattle be sourced from outside the bluetongue zone in northern Australia.

While some exports of bos Indicus have been tried in the past, the market maintains a strong preference for bos Taurus cattle.