A DROP in domestic cattle prices and some processors reportedly booked out until July has raised questions about the prospect of live export numbers ramping up again.
After an extremely quiet 2022, Australia’s main live export market for slaughter-weight cattle, Vietnam, has not seen a major increase in volume this year.
Two boats left Townsville last month with a total of 10,511 head for the month, which is more than double the 4,566 head in May last year. It is significantly down on the May average, with more than 20,000 for the month going to Vietnam in the four years prior.
However, Beef Central’s South-East Asia market reporter Dr Michael Patching said in his latest monthly column that there is increasing interest from Vietnamese importers with the lower cattle prices cattle prices making it profitable to bring cattle in from Australia.
The Vietnamese market has been heavily impacted by China’s strict Covid measures in recent years, which stopped Vietnamese cattle being exporting to China, along with its neighbours Cambodia, Thailand and Laos.
Vietnam still oversupplied
Managing director of Darwin-based live exporter Australian Cattle Enterprises, Patrick Underwood, said Vietnam was still an oversupplied market. He returned from a trip to Vietnam last week.
“The correction in Australian cattle prices has started to re-open commercial opportunities in Vietnam. It is currently summer in Vietnam when beef consumption is lower than in winter, particularly in the north, where they like hotpot dishes and meals with more meat when it’s cold,” he said.
“However, we are still facing very strong competition from Thailand, Laos, Cambodia and the local Vietnamese cattle.”
Mr Underwood said China was starting to re-open some of its cattle trade with South-East Asia, but it was not taking the big numbers it has in the past.
“Until China starts to take some cattle again and those borders are fully open then I don’t see Vietnam taking off – particularly this year,” he said.
“I think we are more likely to see a cautious rebuilding of the trade with one-or-two boats per month. I can’t see it getting back to those big years we saw in 2018-20, when it was taking a couple-of-hundred thousand, for the foreseeable future.
“We have been doing some boats to Malaysia and the Philippines, which have been taking similar cattle to what would go to Vietnam.”
Not big numbers in North Queensland
Elders Townsville-based agent and former Qld live export manager Tom Kennedy also said he could not see the trade pick up significantly this year.
“It always comes back to economies and what the middle-income earners are doing – we have to realise that these countries are in the same predicament as we are with inflation,” he said.
Mr Kennedy said he was not sure Qld had as many cattle as some thought and more rain later in the year could firm up the market.
“I would not say we have an abundance of numbers of suited to Vietnam, if the boats keep trickling out like they are then we will have enough to cover it and not much more,” he said.
“But I can’t see this job firming up until we get some more rain, the country has hayed off around here and that’s why the processors and live exporters have the stick.”