Australia

Aussie livestock exports declined

Livestock

Over the first 9 months of the year, cattle exports have dropped by 12% compared with the same period of 2019.

Posted on Nov 05 ,09:42

Aussie livestock exports declined

A tighter supply of cattle combined with rising oil prices, appreciation of the Australian dollar and rising Indian Buffalo Meat competition have created challenging market conditions for Australian livestock exporters. As a result, export volumes remain well below year-ago levels. Live cattle exports in September reached 78,000 head, back 28% on the same month last year, and for the year-to-September, volumes are back 12% on 2019 levels, according to Meat and Livestock Australia (MLA).
MLA’s Cattle Industry Projections – October update states that live cattle exports are expected to decline 16% in 2020, largely due to the contracting supply levels in northern Australia.

The net effect of an appreciating Australian dollar and high feeder cattle prices is a challenging export scenario for South-East Asian importers, which is evident in the low export levels seen in recent months. Additionally, a recent resurgence in the price of oil, which directly impacts livestock shipping costs, is also presenting challenges.
Australian live feeder cattle exports to Indonesia were 373,000 head for the year-to-September, down 24% on 2019 levels. While export levels were relatively good through the first half of the year, rising input costs are weighing on import demand. Additional challenges include currency volatility and the increasing presence of Indian Buffalo Meat (IBM).

Cattle exports to Vietnam are up 16% for the year-to-September, reaching 218,000 head. However, shipments have been low in recent months, typical for this time of year. In the lead up to the Vietnamese New Year in February 2021, cattle shipments typically lift as a strong period of holiday demand is expected. However, given the current high prices of Australian cattle, this could present challenges for Vietnamese importers.
Another final consideration for the Indonesian market is the recovery of Indian Buffalo Meat exports. The Indian processor industry was heavily impacted by the spread of COVID-19, however, capacity has since recovered and export volumes to key markets, such as Indonesia, Vietnam and Malaysia, have recently surged. Given the high prices associated with the live export channel, Indian Buffalo Meat could serve as a more affordable alternative in the coming months.

Screenshot_2020-11-05 Cattle exports decline as high prices impact demand Meat Livestock Australia

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