A few weeks ago live export steer prices in Darwin were easing as worsening seasonal conditions began to force more cattle onto the market.
Trade quotes in late February for Indonesian feeder steers ex Darwin eased from 320c/kg livesweight to 310c, reflecting both the tough demand conditions and the expectation that supply would continue to increase as dry conditions pushed more cattle forward.
However the recent rain in Queensland has reset the equation by putting the brakes back on supply.
The impact of the re-tigthening of supply on cattle prices has been offset to some degree by the fact that demand has also eased, now that the cattle needed for this year’s Ramadan/Lebaran festivities in Indonesia in May/June have now largely been shipped.
Recent rises in the AUD versus the US dollar have also not helped the demand side of the equation, however a full one cent fall in the AUD since last Thursday to AUD 77.1c will have reduced that pressure a little.
But essentially the impact of rain in slowing up supply once again has served to restabilise prices, with rates in the past fortnight rising again to the to 320c/kg range.
Australia exported 35,600 cattle to Indonesia in February, well up on the 21,000 head shipped in February last year.
After two months total cattle exports to Indonesia for 2018 are now far running 22 percent above the first two months of 2017.
As mentioned exporters have attributed some of that increased activity, which appears to defy the ongoing talk of continued demand challenges in Indonesia due to the increased supply of Indian buffalo meat in the market, to a short-term increase in orders to ship cattle to Indonesian feedlots so they can be fed in time for Ramadan.
One of the bright points for the Australian cattle export trade from the latest monthly livestock export figures was another shipment of cattle to Turkey (8150 head), the first since November 2017, and the first shipments to Russia (13,700 head in February) since March 2016.
However MLA notes the Russian shipments were for a specific, one-off order which suggests these volumes are not likely to continue in 2018.