Beef exports change pattern

15 June 2004

The fallout from positive BSE tests in both the US and Canada during 2003 has resulted in significant changes to Australia's traditional trade flows for beef, with some product normally destined for North America now being shipped to Japan and Korea. The BSE-induced bans placed on imports of US and Canadian beef have seen increased volumes of beef remain on their domestic markets, reducing demand for imported beef and at the same time creating a shortage of beef in markets that rely on North American product. With two of the largest customers for US beef being Japan and Korea, the ban on US beef has resulted in demand for Australian beef in these two markets jumping by 46,000 tonnes in the calendar year to May, to record levels, with exports for the first five months of 2004 up 31% and 39% respectively on last year. In contrast, Australian beef exports to the US have fallen 9% on last year, to 121,600 tonnes sw for the first five months of this year and exports to Canada have plummeted 88% to only 2,450 tonnes sw. This brings the combined decline in exports to North America for the calendar year to May to just below 30,000 tonnes sw. Australian beef has also been diverted from smaller markets to Japan and Korea, with exports to other countries down 13,000 tonnes sw on last year to 31,000 tonnes sw. The drop in exports to the Philippines, Indonesia and Singapore has been particularly severe, accentuated by intense competition from cheaper Brazilian beef and Indian beef and buffalo meat. Total Australian beef exports for the first five months of 2004 were almost 3,000 tonnes sw higher than last year, at 341,400 tonnes sw, reflecting the lift in export demand and a small rise in production. Meanwhile, Brazilian beef exports surged 20% higher than year ago levels in the calendar year to April 2004 to 246,523 tonnes. Export revenues rose more significantly, gaining 62% to reach US$527.7 million with the average tonnage value of exports rising 35% to US$2,141/tonne. Brazil's major export destinations were the EU, Chile, Egypt, Iran and Russia. Over the same four-month period, Australia exported 261,305 tonnes. Australia's major export destinations were Japan, the US, Korea and Taiwan. Although unprocessed, Brazilian beef is absent from these markets, due to Brazil's foot and mouth disease status, it competes in more minor but important growth markets for Australian beef such as the Philippines, Singapore and Hong Kong. On 31 May 2004, the Director General of Livestock Services, Ministry of Agriculture (MOA) in Indonesia announced that the ban on imports of some ruminant products from the US had been removed. The ban was imposed after the US BSE announcement on 23 December 2003. The products now allowed to enter Indonesia include meat, semen, embryos, hearts, livers and feet tendon. The restrictions on meat and bonemeal remain, according to a United States Department of Agriculture (USDA) report. According to the USDA, the announcement states that the MOA made the decision based on an evaluation of the developments in the BSE situation in the US, the US surveillance system, and the strict monitoring measures implemented at slaughtering plants and throughout the processing chain. In 2003, the US accounted for a 5% share of the total Indonesian beef import market. Source: Meat & Livestock Australia

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