By Matt Dalgleish | Source: DAWR
The Department of Agriculture and Water Resources (DAWR) released the May beef exports figures showing a strong surge in consignments to Indonesia pushing the proportion of Australian beef exports to Asia to 60% of total export volume for the current season, the highest this proportion has been since 2013.
Despite the big jump in Indonesian consignments the overall export volumes for the 2016 season continue to replicate the pattern set by the five-year average – figure 1.
Overall beef export volumes remain robust with an increase of 17% during May to see 100,844 tonnes swt reported. Despite the good month to month result volumes remain lower than the same time last year largely due to a reduction in consignments to the US.
The 2015 season saw uncharacteristically large volumes of Australian beef product shipped to America so the year on year decline in export volumes is representative of a shift back to a more normal pattern rather than a contracting export market in need of concern. Indeed, exports of beef to the US during May totalled 29,257 tonnes swt, which is 14.7% above the five-year average for May.
Similarly, beef exports to South Korea reported at 14,474 tonnes swt represent an increase of 20.5% above the average May volumes for the last five years. In contrast, volumes to Japan are not demonstrating the same vitality. The May consignment of 23,460 tonnes swt reported is 17.7% below the five-year average for this time of year.
The dip in Japanese demand for Australian beef more than compensated by a very strong surge in shipments to Indonesia during May. The reported 10,446 tonnes swt a staggering 404% increase from the April volumes and 260% above the five-year average for May. Indeed, the Indonesian beef export volumes for May are now the highest on record beating the October 2015 peak of 7,537 tonnes swt by 38.6% - figure 2.
The surge in beef exports due to the Indonesian Trade Ministry increasing the country's beef import quota to 27,400 tonnes, which is nearly triple their Agriculture Ministry's recommendation, in an attempt to keep beef prices affordable during the Ramadan season. The strong Indonesian beef exports volumes for May pushing the 2016 season pattern for total exports to Asia toward the top of the seasonal range – figure 3. The 62,390 tonnes swt reported for beef exports to Asia representing a 7.6% increase on the five-year average level for May.
Contractions in beef export volumes to one destination can be offset by increased trade to other centres so that the overall impact upon export volumes is negligible. Diversity brings stability and confidence to a market and, as is the case within the natural environment, diversity is a sign of health and vitality.
Efforts undertaken by industry bodies like the MLA to expand the export sector for red meat by the continual promotion of Australian beef overseas to a variety of regions are vital to maintain a broad and diverse market place for our producers. Diversity of destination and diversity of product (live cattle exports as well as chilled and frozen cuts) are essential for the overall health of the beef sector.
This is a further supporting factor in the positive outlook for beef in general, and for Australian beef markets specifically. Coupled with the excellent seasonal conditions on much of the Eastern seaboard it is hard not to have a very positive feel for the cattle markets in the short to medium term.
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