June 4, 2012

Australia's May beef exports rebound

When domestic production was held down by a string of public holidays, Australia's beef exports rebounded in May from April.

About two-thirds of domestic production is exported, with the shipping volumes driven by output levels.

Australian beef exports in May jumped 19% on month and rose 2.6% on year to 86,886 tonnes, taking shipments in the first five months of this year to 368,068 tonnes, up 1.0% on the year-earlier period, according to monthly export figures issued Friday (June 1) by the Department of Agriculture, which doesn't comment on the data.

The Australian currency staged a sustained decline in value against the US unit in May, a slide that normally would see prices and sentiment across livestock markets responds in a spirited fashion.

"However, 2012 seems to be proving an exception, with the prolonged European and global economic uncertainty overshadowing any positives that could result from the improved price competitiveness of Australian red meat," MLA said in a statement.

The renewed concerns about the global economy have generated considerable uncertainty across many markets, and recent history suggests "when the global economy gets the wobbles, overseas demand and prices take a significant hit as importers and end users wait to see the response from consumers," it said.

In such a situation, the weaker Australian currency tends largely to act as a shock-absorber, rather than delivering the much sought after price benefit, it said. Shipments to the three biggest export markets all rose in May. Exports to Japan in May of 30,578 tonnes rose 24% on month and were little changed on year, taking exports in the first five months of 2012 to 120,553 tonnes, down 11% on year.

Shipments to the US in May of 19,724 tonnes edged 3.0% higher on month but soared 30% on year. Exports to the US in the first five months of the year of 100,778 tonnes rose 59% on year.

Exports to South Korea of 9,130 tonnes in May jumped 21% on month and 25% on year, but shipments in the first five months of 2012 of 40,870 tonnes fell by 34% on year. Competition from the US is constraining demand for Australian product in Japan and South Korea, MLA said.

Exports to Russia have increased for every month so far in 2012 coming out of the northern winter, but total shipments for the five months were 17,250 tonnes, down 30% on the year-earlier period.