Record for January beef export trade

Jon Condon, 05/02/2013


Drenching rain across parts of Eastern Australia around the Australia Day long weekend came too late to impact on January monthly beef exports, which notched up a record start for the new calendar year.

Shipment data released by the Department of Agriculture, Forestry and Fisheries yesterday showed total Australian chilled and frozen beef exports for January at 55,147 tonnes.

That’s 17 percent higher than the January period last year, and 21pc above the five-year average, setting an all-time record for the month. The only year to come close was drought-affected 2007, when Australia shipped 55,062 tonnes of beef into export markets during January.   

Prolonged dry conditions pushing cattle to market, and minimal rain-related cattle access problems for processors (until the Australia-Day long weekend, at least) helped drive supply-side momentum behind the strong result this year.

In contrast, January last year saw trade reach just 47,000t; in 2011, the year that Cyclone Yasi tore through southern Queensland and northern NSW in mid-January, monthly exports totalled 41,000t, while the wet year before that was little better at 45,000t.

Further encouraging growth in trade to an emergent China, solid progress in Korea and smaller, incremental gains in trade into a host of first and second-tier customer countries contributed to the strong January result.

Following a strong growth pattern which started around July last year, China again featured strongly in trade growth, taking 4437 tonnes of Australian beef during January. This contrasts with just 253t for January a year earlier.

China continues to consolidate as a serious customer for Australian export beef, after finishing 2012 with total Australian imports totalling 32,906t. That was up a colossal 324pc on 2011 trade (7754t) – all the more remarkable given that the surge in trade did not really start until July, after which four consecutive monthly records were set.

While January trade to China was down substantially on December (7680t), that was largely expected as importers were stockpiling supplies for the Chinese New Year peak consumption period.

Somewhat surprisingly, the volume of trade in 2012 positioned China as Australia’s sixth largest beef market for the year – bigger than both Indonesia and Russia, and not far behind Taiwan – and the strong start to 2013 suggests that record may again be under threat.

South Korea also showed a solid improving trend during January, taking 7790t, up more than 1000t on trade in January a year earlier, but a long way from December’s very strong 13,900t. The strong start highlighted Korea’s uncertainty around US supplies and strong demand for grassfed product.

Another strong performer during January was the combined Middle Eastern countries, which more than doubled their intake of Australian beef in January, compared with a year ago, to 3280t. This continues a trend of encouraging growth seen during 2012. The largest destination, Saudi Arabia, shot up to 1061t, from just 161t in January a year earlier.  

Domestic beef production challenges in the US caused by drought were reflected in strong January exports, which at almost 12,000t rose 1pc on January last year, and 9pc above the five-year average. The result lays a solid foundation for an anticipated strong export year ahead to the US.

Trade with Japan during January increased 1pc on the corresponding period in 2012, reaching 16,964t, but the figure was still 6pc below the five-year average. This reflected the weakened state of the Japanese economy and the lack of consumer confidence, and increased competition from the US in the face of recent changes to Japan’s age limit restrictions on US beef.

With the anticipation of limited shipments arriving into the market in early February due to flooding across Eastern Australia, Australian chilled grassfed beef prices during the last week of January reportedly averaged 5-15pc higher than the same time last year in the Japanese wholesale market.

Among the other improvers, the European Union took 830t in January (520t a year earlier); Taiwan rose 24pc on last year to 1781t; and the Philippines almost doubled its year-earlier beef imports to 1337t.

On the negative side of the ledger, Russia and the former Soviet states continued to disappoint after looking like one of Australia’s real growth prospects during 2011-12. Russia took just 811t during January, down 33pc year-on-year.

Indonesia’s self-sufficiency plans which have greatly curbed access for both beef and live cattle exports again impacted on trade, with exports reaching just 1086t last month, a further 9pc decline year-on-year.

Hong Kong also fell 46pc compared with a year ago to 218t, possibly reflecting the recent clamp-down by Chinese authorities on the ‘grey trade’ for beef entering the country via neighbouring countries to avoid taxes and regulatory controls.



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