July 7, 2010

Australian beef exports continue to diversify into more markets, but shipments to the biggest overseas buyer - Japan, are languishing on a weak economy, according to Meat & Livestock Australia Ltd (MLA).

The overall outlook for beef exports is quite robust except for Japan, where a flat economy and soft consumer spending suggest market weakness is not about to turn around anytime soon, MLA said Tuesday (Jul 6).

Australia is the world's second largest beef exporter after Brazil, with annual trade expected to exceed AUD4.5 billion (US$3.8 billion) this year.

In June, Australian beef exports of 87,212 boneless tonnes rose 2.0% on-month and jumped 5.8% on-year, taking total beef exports in the calendar first half to 436,095 tonnes, according to official figures. Increased beef production in May and early June helped push exports higher in June, MLA said.

Exports to Japan of 27,691 tonnes in June fell 10% on-month and slumped 16% on-year, an indication that Japanese beef demand is seasonally sluggish throughout June, while beef inventories are reportedly adequate.

Beef exports to South Korea were a record for June at 12,109 tonnes, up 12% on-month and up 14% on-year, reflecting the impact of a strong economy and a sharp contraction this year in domestic beef supply.

Demand from China and Russia is sustainable, as it is underpinned by consumer demand and an inability of local supply to keep up, with both Chinese and Russian beef herds contracting in recent years.

Shipments to the US of 24,433 tonnes in June rose 2.4% on-month and 12% on-year and took first-half shipments to 105,763 tonnes, down 28% on-year.