Live Export

Ships loading in Darwin for Q3 quota

James Nason, 17/06/2013

More than two weeks after Indonesia said it would bring third-quarter live cattle import quotas forward by one month to help ease a beef supply squeeze in the country, exporters have received the green light to commence exports.

Two vessels, the MV Ocean Drover and the MV Torrens, are currently loading cattle in Darwin for export to Indonesia under the advanced third-quarter quota this week.

Exporters were told in late May that third-quarter permits, traditionally allocated for the months of July, August and September, would be brought forward to June, July and August.

However, the earlier start has already been delayed by two weeks due to the time it has taken for Jakarta to issue a government decree formalising the new dates and to release import permits.

While Indonesia’s decision in late May to move the quota forward was widely reported as a breakthrough for Australia’s northern cattle industry, the reality is that no increase in import volumes has been made, and, in practical terms, the only effect has been to allow exporters to commence shipments for the third quarter a fortnight earlier than usual.

“It has not really had much of a material impact on the market at this point, apart from placing a short term squeeze on ship utilisation,” Elders senior marketing manager for international live exports Tony Gooden told Beef Central.

Exporters now have until August 31 to fill third-quarter permits, but most expect orders to be filled within the next month.

With only 46,000 cattle allocated for the three-month period, which compares to well in excess of 100,000 cattle for third-quarter quotas in previous years, most importers will receive their entire allocations for the quarter in a single shipment.

Exporters are also waiting to find out if fourth-quarter quotas will also be brought forward.

Indonesia’s stated reason for bringing third-quarter quotas forward was to improve beef supply and reduce pressure on beef prices in the lead up to Ramadan.

However the revised arrangements have done little to affect supply and demand dynamics in the market, an import industry source told Beef Central.

“The cattle price remains unchanged, and we are still seeing increasing demand heading into the fasting month,” the importer said.

The lack of volume orders from Indonesia continues to depress prices for live export steers in northern Australia, with latest rates quoted at around $1.50-$1.60/kilogram for steers ex-Darwin, depending on quality, well down on the $2/kg rate available at the start of the year. 

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