Live Export

NQ floods: Live export ships diverted or delayed

James Nason, February 8, 2019

Widespread flooding across north western Queensland has caused some disruptions to the live export trade out of Townsville.

Several shipments scheduled to leave the port in coming weeks for Indonesia and Vietnam have either been diverted to other ports or delayed, but none have yet been formally cancelled according to sources close to the trade.

Beef Central understands ILE has rescheduled a planned shipment from Townsville to Darwin, while LSS has diverted a shipment of feeder cattle for Indonesia from Townsville to the Raglan yards for export out of Port Alma near Rockhampton.

NACC and Wellard still have shipments booked from Townsville.

Wellard told Beef Central it’s order out of Townsville has been delayed but not cancelled, with the timing of the shipment to be reassessed early next week.

Elders Townsville’s Tom Kennedy said exporters, export yards and the Department of Agriculture were working to minimise disruption to the trade.

“If things semi-dry out and we get some clearance the expectation is current exports planned out of Townsville will continue, but may be delayed by one or two days.

“The yard contractors are going out of their way to try to help the exporters.”

Two weeks ago the northern export trade looked set to be awash with supply as stations began mustering a month or two earlier than usual in order to destock and rest dry paddocks.

Now the north is literally awash, which will dry up the supply of cattle again and put upwards pressure back on prices.

However it is still too early to tell what the effect will be.

Prior to the NW Qld flooding feeder steer prices at the Darwin Port were quoted at $3.25c/kg.

Mr Kennedy said some recent sales for Townsville shipments were at rates equating to about 10c/kg higher than that mark, but that was largely because cattle were coming in a month earlier than usual and had less weight on them.

“I guess you could say there is compensation being paid for cattle to be sold a month or two earlier than they needed to be sold,” he said.

There is also no telling yet the extent to which cattle losses sustained in this week’s event – which could extend from tens of thousands to hundreds of thousands according to some estimates – will limit supply that would have otherwise been been available for live export orders in coming months.

Potential disruptions to Ramadan supply

In his latest monthly report for Beef Central published yesterday, Indonesian based market analyst Dr Ross Ainsworth said the timing of the floods could disrupt supply to Indonesia for the critical Ramadan period, which begins on May 4 and ends on June 4, followed by Lebaran on June 5.

“Peak demand during this festival period is the last 10 days of Ramadan and the first few days of Lebaran,” Dr Ainsworth explained.

“An average feeding period of 120 days means that feeder cattle need to be imported at the beginning of February to meet the peak market at the end of May.

“My most recent report of northern Australian feeder prices indicated that AUD$3.25 was about the money but this was just prior to the heavy rainfall events.

“If the rain continues, this rate could easily pass $3.50 with $4 an easy mark when the drought is finally broken. If February produces the very low import numbers seen in January the supplies available at the end of May will be severely restricted with great pressure for price increases of fresh beef.”

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