Australian live cattle exports to the key growth markets of Philippines, Vietnam and Malaysia have grown by more than 40,000 head in the past 11 months, as exporters seek to diversify their customer base in South East Asia.
Australia’s latest live export shipping figures show that cattle exports to the Philippines have almost doubled in the past 11 months to 37,071 head, while shipments to Malaysia have more than doubled during the same period to 33,400 head.
Shipments to Vietnam have risen from 1193 head to 9924 head.
At the same time shipments to the major market of Indonesia fell by 25pc or 81,000 head from 329,419 cattle in July11-May 12 to 247,948 cattle in July 12-May 13, reflecting reductions in quotas imposed in line with Indonesia’s desire to achieve self-sufficiency in beef production.
Exporters are reporting increased demand from various South East Asian countries at present.
This is being driven partly by pricing, given that Indonesia’s reduced competitive presence in the market has seen the price of Australian cattle fall and become more attractive to price-sensitive markets.
However demand is also being driven by the fact that SE Asian economies are growing and their own domestic supplies of cattle are depleted and not able to satisfy rising demand.
Many SE Asian countries have eaten through their domestic herds, while other sources of supply, such as imports of cheap Indian buffalo meat (for those countries with relaxed foot and mouth disease protocols) are also said to be becoming harder to source, due to increased competition for that product from Eastern Europe, which in turn is making it more expensive.
Some exporters believe Vietnam has the potential to become a much larger import customer, as it is moves to expand its own cattle processing sector to produce beef for its own domestic consumption and for export into neighbouring China.
Malaysia is also recording strong growth, with demand for cattle and beef rising accordingly.
The Philippines was once Australia’s largest market for live cattle, taking more than 300,000 head per year, until currency challenges and moves by the country to open its doors to cheaper supplies of boxed beef from FMD affected zones saw the live cattle trade dry up over a decade ago.
However the Philippines has also all but eaten through its own cattle herd, and live cattle imports are again seen as a means of securing the supply required to satisfy demand in the growing economy.
Despite the demand that exists throughout the region, the main factor constraining export volumes to date has been the requirement for Australian exporters to bring supply chains in each market up to approved welfare and traceability standards before they can ship cattle to those markets.
Under the Exporter Supply Chain Assurance System (ESCAS), exporters must gain certification for the feedlots and abattoirs that will handle their livestock delivered to the market.
The system means that if any breaches of welfare are detected, authorities can impose penalties or sanctions upon the individual exporter involved without forcing an entire market to close. That is what happened in June 2011 when all exports to Indonesia were banned for a month in response to footage showing Australian cattle being subjected to cruel treatment in Indonesian abattoirs, penalising not just the exporters involved but others who supplied cattle into modern facilities and abattoirs in Indonesia.
The latest live export figures just released, current to May 2013, show that Israel currently ranks as Australia’s second largest live export market for cattle, taking 54,696 head in the 11 months from July 12-May 13, 5pc more than the previous year.
A number of Middle Eastern destinations have also recorded significant growth in the same period, including Jordan, where exports rose from 600 head in July 11- May 12 to 9000 head in July 12-May 13; Libya, which rose from zero to 6900 head and Saudi Arabi which increased from zero to 3550 head.