GINA Rinehart’s Hancock Prospecting has told a live export forum in Townsville this morning that it hopes to start exporting cattle from northern Australia to a quarantine island near China in about one year’s time.
Hancock’s innovative quarantine island plan is potentially a very big deal for the entire northern Australian cattle industry because, if the proposal wins Chinese Government approval, it will effectively give producers across northern Australia much better access to the Chinese market than they have now.
Despite only a handful of air and sea consignments from Australia to China since the new protocol was signed in 2015, China is still seen as a market of potentially major growth for Australia’s live cattle export industry going forward.
However, protocol restrictions applied by China largely limit supply opportunities at present to Southern Australia. China imposes strict biosecurity constraints on cattle imports from the large area of northern Australia covered by the Bluetongue Virus possible transmission zone.
This is despite the fact the strains of bluetongue that exist in northern Australian have never caused clinical disease in Australian cattle.
Hancock has signed Heads of Agreements with four Chinese joint venture partners to establish a cattle receiving, quarantine, lotfeeding and processing facility on Jintang Island, just off the coast near Shanghai.
Hancock’s Adam Giles told the AgForce livestock export forum in Townsville this morning that Hancock is currently seeking a ruling on the bluetongue issue around Jintang Island, acknowledging that it is not part of the mainland of China.
He said everything has been positive to date. The Chinese Government had run a 12-month trial through its quarantine system which ended in August, and was currently testing if imports into Jintang Island would cause any concerns for the mainland.
“We don’t believe they will,” he said. “The important point about this model is it supports the one belt, the one road initiative that the president of China is pursuing.
“We’ve responded as a company to China’s requests, we think we should get a good ruling on that.
“Working with the Chinese Government has been a dream ride – they have been very professional, and within our joint venture, there is a reason we have picked the partners we have picked: they are the best in China, some of the leaders.”
Mr Giles said the existing contract has the company poised, pending regulatory approvals and construction, to start exporting northern cattle to the quarantine island in late 2018, or early 2019.
If that approval is achieved, it will create a strong new level of demand for feeder and slaughter cattle from northern Australia.
Hancock ‘s initial target is to export 150,000 head per annum, building up to 300,000 head per annum over time.
Mr Giles said the company’s northern properties will turn off up to 50,000 cattle per year, meaning that it will be going into the market to purchase the balance when the supply chain is up and running.
“Our target is potentially to move towards 300,000 head per annum,” Mr Giles told the audience of about 100 cattle producer and live export stakeholders.
“That should get us an export revenue of between $150 million and $300 million per annum. The benefit for industry is that that money will flow through the supply chain and will open up a new market that will increase demand in northern Australia which should benefit all parties and services.”
“That demand will help industry by lowering its risks, and that stability will motivate a greater level of investment and stabilisation in herd rebuilding right across northern Australia.”
Australian Livestock Exporter’s Council chief executive officer Simon Westaway told the conference that figures showing live export volumes in 2017 reinforced the importance of opening new markets, as Hancock was doing.
Exports to Indonesia in 2017 were down by 9 percent, shipments to Vietnam were down by 44pc, while shipments of dairy and breeding cattle exports were down by 35pc.