June 8, 2009

Australian beef and veal exports in May declined on-year as demand from key export markets continues to suffer from the recession beatings and the appreciating A$.

While exports for the month totalled 82,856 tonnes swt - down 12 percent year-on-year - shipments last May (93,333 tonnes swt) were the third highest on record, boosted by record exports to Russia.

The A$ went up by 9 percent during May, moving from 72US cents to just below 80US cents by the end of the month (averaging 76.3US cents). While the A$ was 20 percent below the same month last year (94.9US cents), it has now appreciated 25 percent against the US$ and 35 percent against the Japanese yen since the start of February, with the volatility adding to the already difficult trading conditions.

May exports to Japan slipped back 2 percent, to 33,998 tonnes swt, with steady demand for chilled beef partially offset by reduced frozen buying. As recessionary conditions continue to bite, consumer demand at the retail and fast food level remains positive, while demand in other food service segments remains weak. Although May is traditionally a higher volume month for exports to Japan, shipments this May were back 5 percent on the average for the past five years (35,717 tonnes swt) - but it was the highest monthly volume since July last year.

Exports to the US continue to perform above last year's low levels, up 38 percent in May. Compared to the May average for the past five years, exports were back 20 percent, totalling 23,780 tonnes swt.

Negative consumer sentiment towards US beef continues to subdue the Korean market, with many importers facing financial difficulties after being forced to sell stocks of high priced US beef at reduced prices. This disruption has impacted Australian exports, which fell 24 percent in May, to 7,954 tonnes swt.

Markets to record significant growth year-on-year for the first five months of 2009 include Hong Kong (up 131 percent) and China (up 121 percent), with exports reaching 3,011 tonnes swt and 2,054 tonnes swt, respectively - already exceeding the annual volumes forecasted for 2009. Exports for 2009 so far have also increased to Indonesia (up 33 percent), Taiwan (up 25 percent) and Canada (up 140 percent).