112th Edition: May 2023
Key Points:
- Ramadan is over with predictable spike in beef demand and price around Eid al fitr
- Vietnam uptick on cattle imports but now exiting beef season
- Staff training opportunities in SE Asia
Meat the Market Asia – Podcast Link (Spotify)
Meat the Market talks with local farmers, traders, any real people in SE Asia so you can understand what is going on directly from them rather than secondhand from me. Contact me if you have a story you want to share.
Indonesia : Steers AUD $5.40 / kg live weight (Rp10,002 = 1AUD)
Ramadan ended in Indonesia on the 20th April with the expected increase in beef consumption for Eid al Fitr, also called Lebaran in Indonesia. Despite best efforts from the Indonesian Government to stabilise prices through import of Indian and Brazilian beef (shipment delayed) beef prices reportedly still increased 30-50 percent, up to IDR 170,000/kg in some places from the 17th April (normally IDR 126,000). In Greater Jakarta the impact was less due to the exodus of people and the two holiday periods that occurred in Indonesia this year from the 19th to 25th April and 26th April to 2nd May. Trading in Greater Jakarta has largely now all returned to normal conditions now the current festive periods have ended.
General slaughter numbers including local cattle were reportedly up 3-5 times normal numbers across Lebaran with a concentration in more remote areas. For Australian cattle in feedlots there were mixed reports with some increase in demand and price, again largely dependent on the location of the feedlot. Slaughter numbers have rebounded in the Greater Jakarta region to pre-Ramadan, but still below pre-COVID throughput.
This month’s Podcast I met with Pak Handi and we discussed Ramadan and some considerations for downstream trading of local slaughter and imported beef. His parent company Citra Agro Buana Semesta (CABS) is well known in Australia and they have been importing Australian cattle since the mid 1990s into their feedlot in West Java. He works for a subsidiary company called Berkah Citra Agro which is responsible for the sale of beef in the Bandung region including processed beef from Australian imported cattle, imported frozen beef, and Indian buffalo meat (IBM). They have seen the opportunity and need to extend downstream and they have invested in restaurants, retail, and wholesale sales.
Agro Meat Shop in Bandung selling hyperlocal produce. Source: https://agromeatshop.com/
They continue to face challenges with selling all cuts of meat profitably. This is a challenge for all meat trading businesses but even more challenging when a company processes relatively low volumes of cattle and has variable demand for different cuts. They have compensated by salvaging cuts from cattle of other traders that are using the same abattoir and combining with imported beef to meet their customer demands. They also sell their cattle into both modern channels and traditional channels such as wet markets. And although only a limited number of cuts from a small percentage of their cattle go into modern channels, they believe it is an important way to future proof their business, create a point of difference, and remain profitable with live cattle imports.
The discussion is an interesting look at the challenges businesses face in Asia and some of the unique problems and solutions they have had to find. But most of the problems are the same as those faced across the world, meaning there are always opportunities to support their development. It is also a good examination of the importance of diversification in an evolving market, and the potential synergies between modern, traditional, boxed and live.
As reported last month, the LSD and FMD situation in Indonesia is somewhat controlled and similar to what we observe across the remainder of Southern Asia. In a recent webinar hosted by National Farmers Federation on 4th May, modelling shows that the risk of both FMD and LSD is now reduced, but it will be important to remain vigilant, especially in the north. The Indonesian reporting website for FMD appears to be live again with 12 million doses of vaccine reported to be administered across all species, but this is effectively no change from the last report in March.
Brazil Live Export Ban
As previously reported by Beef Central a Brazilian court judge has moved to ban the export of live cattle from all ports in the country. Brazil exported a shipment of 14,000 head of cattle to Vietnam at the end of 2021 and is regularly rumoured to be sending shipments to Indonesia.
It is unlikely that the Brazilian ban will be upheld in higher courts as the government are supportive of the trade. It is probably not sufficient to significantly deter any trading discussions. It is important to note as both Brazil and NZ’s recent ban on live export shipment are a good reminder for Australian live exports of the growing importance of animal welfare globally including in places like Brazil.
Philippines: Slaughter Steers AUD $3.71 / kg liveweight (P. 37.7 = 1AUD)
The price of beef and slaughter steers in the Philippines has remained relatively constant over the last month. Beef knuckle in the wet market is around P.560 and supermarket P.600. Slaughter steer price in Mindanao is between P.130-140 and the only significant shift in AUD is due to changes in exchange rates.
The second chat we had this month was with Raymond Hernandez from RSRH Livestock in the Philippines. Raymond and his brother Richard are third generation cattle farmers and are one of two remaining importers of Australian cattle in the Philippines. They began investing in their supply chain several years ago with a modern abattoir and over COVID they needed to look to other sources of income and so invested in beef shops and restaurants to complement their distribution into food service.
Richard and Raymond are now processing 45 head of cattle a day into a high quality abattoir, which is impressive numbers in South East Asia. The most impressive thing about the RSRH business is the passion for local industry and supporting better conditions for their workers and promoting local production. Their family has been in the cattle industry for 52 years and they are good feeders of cattle, so venturing downstream has been a huge learning curve for them.
RSRH Livestock abattoir. High meat standard abattoir also offering workforce training. Source: https://rsrhlivestock.com.ph/
RSRH abattoir is certified for staff training and is open to opportunities to collaborate with Australian abattoirs or labour hire companies. And they are looking to continue to build greater relationships with Australia into the future, beyond trading and into partnerships.
Vietnam : Steers AUD $5.03 / kg live weight (VND15,905 = 1AUD)
Not much change in the situation in Vietnam over the last month in terms of price with steers around VND 82,000. There has been a steady increase in imports coming into Vietnam over March and April with 20,721 cattle now imported into Vietnam in 2023 up from 7,730 in 2022 but down from pre-COVID levels which were regularly above 50,000 head by this time. These imports include 30pc breeder cattle and 70pc slaughter cattle, but no feeder cattle. It is possible that we may see some increase in supply to Vietnam throughout the year as more cattle become available and traders look for opportunistic imports. The lack of feeder imports is an indication that Vietnamese traders expect the price to continue to drop.
However the general outlook for live export to Vietnam has not changed since previous reports. And we are expecting the annual decrease in beef consumption during the summer season, especially in the north of Vietnam. Since the beginning of the year the importer TnT-159 has gone bankrupt and it is understood that Hoa Phat, Australia’s largest importer of live cattle, has several of their feedlots for sale.
In regard to market development, on April 19 San Ha Company Ltd (Vietnam) partnered with Response Group International (Aus) to launch the “Australian Meat School”. San Ha is a HCMC based company and has a long history of poultry and processed meat processing and sales. The cooperation with Response is designed to develop an Australian standard meat processing factory with improved food safety and efficiency. They are now diversifying product offerings to also include red meat through and a new butcher shop. It is an interesting new development and the potential to support skills development in Vietnam for the wider meat processing industry, including for the red meat sector in Australia.
Dr Rodd Glass – Response International and Mr. Nguyen Doan Giang – Deputy General Director San Ha at the opening ceremony. Source: VN Express
Northern Australia (AUD $4.00)
Prices in Northern Australia continue to remain stable in Darwin (Feeder steer AUD $4.20) and drop in Townsville (Feeder steer $3.40) and we have seen a shift with more shipments out of Townsville than Darwin in April.
DAFF reported export Numbers for the different ports in Australia to the end of April. For sea freight out of Australia I have looked at port activity in the first four months of the year to key South East Asian destinations and have also done a comparison with pre-COVID import volumes in 2019, noting that this was a good year for live exports and so these numbers should be viewed as such.
| 2022 (April) | 2023 (April) | Indonesia | Vietnam | China | Other | |
| Darwin | 65,131* | 59,885** | 56,190 | – | – | 3,395 |
| Townsville | 16,565 | 36,662 | 24,156 | 11,125 | – | 1,381 |
| Fremantle | 18,702 | 18,090 | 3,175 | 9,596 | 3,065 | 2,254 |
| Portland** | 39,508 | 27,204 | 1,250 | – | 23,938 | 2,016 |
| Wyndham | 3,576 | 3,608 | 3,608 | – | – | – |
| Broome | 12,475 | – | – | – | – | – |
| Total | 155,957 | 145,449 | 88,379 | 20,721 | 27,003 | 9,346 |
| 2019
PreCOVID |
306,904 | 182,792 | 70,291 | 39,332 | 14,489 |
*Darwin 2,900 buffalo to Indonesia **1,431 buffalo to Indonesia, Malaysia, and Brunei
**Portland all breeder cattle
Thailand Steers AUD $4.59 (Tb 22.86 = 1 AUD)
There appear to be significant numbers of Thai cattle throughout Vietnam again despite borders with Laos remaining officially closed. It is assumed that Thai cattle are transiting through the less regulated Cambodia-Vietnam border and then trucked north. Despite increased cost in taking this route aggregators and traders in Thailand and Laos need to continue to move livestock to minimise losses. The risks involved in the trade from Thailand to China and Vietnam were discussed in more detail in the last edition and in the Podcast with Pui from Loong Chow Farms in Thailand. Otherwise prices remain relatively stable with local bull price at Tb 105/kg.
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