May 21, 2004

Australian Exports Boosted By Asian Ban On U.S. Beef
 

The banning of United States beef by major Asian countries has helped boost Australian exports to its most important markets, a leading farmer's association said on Friday.

The drop in value of the Australian dollar was also helping sales, Peter Kenny, the cattle president of Queensland's AgForce, said in a statement. Queensland is the country's biggest beef cattle state.

Since mid-February, when the Australian dollar hit a seven-year high of 80.05 U.S. cents, the dollar has fallen to below 70 U.S. cents.

U.S. beef has been shunned by major Asian markets, including Japan, since the discovery of a case of brain-wasting mad cow disease in December.

Australia is the world's biggest beef exporter with annual sales of about A$4 billion (US$2.8 billion) a year. It vies with the United States in Asian import markets, particularly in Australia's largest market, Japan.

Ongoing growth in demand for Australian beef, particularly from Japan and Korea, and strong U.S. demand for manufacturing beef has started to boost prices for processors, Kenny said.

The only barrier to greater short-term livestock price gains was the drought in southern Australia and some parts of Queensland, which has increased supplies of cattle being brought to market.

But the big question for Australian beef was when the United States would regain access to the Japanese and Korean markets.

"Cynics suggest it will be after the Japanese elections mid-year, but before the U.S. elections at the end of the year, to ensure the best political result for the incumbent leaders of both countries," Kenny said.

The United States appeared unlikely to re-enter the market soon, as it struggled to implement improved testing and traceability systems, he said.

"This gives Australia a window of opportunity that we must capitalise on by seeking to trade on our excellent food safety reputation," he said.

Australian beef officials have refused to take sides in a growing row between the United States and Japan over Tokyo's more than four-month ban on U.S. beef imports.

Earlier this year, industry marketing concern Meat & Livestock Australia forecast Australian beef exports in calendar 2004 would slip to 1.24 million tonnes from last year's 1.25 million tonnes.

But it was possible Australian exports would reach 1.3 million tonnes if Japan continued to ban U.S. beef into the second half of 2004, MLA said.

Japan wants the United States to test all cattle bound for Japan for mad cow disease. The United States Department of Agriculture on Thursday said it aimed to test at least 200,000 cattle over the next 18 months, a tenfold increase from the number tested for the brain-wasting disease last year.

This has not been enough to persuade Japan to resume its imports of American beef.

($1=A$1.43)