November 3, 2010

Australia's October beef exports soften

Australia's beef exports to most overseas markets in October has softened as the Australian dollar strengthened in recent months, suggesting that Australian exporters are finding competition intensifying with margins tightening.

Beef exports to the US slumped in October while shipments to Russia surged, according to figures issued Tuesday (Nov 2) by Australia's Department of Agriculture, Fisheries and Forestry.

Exports to the US totalled 8,951 tonnes in October, slipping 35% as compared with September and down 45% on-year. In the first 10 months of this year, exports totalled 166,928 tonnes, 25% lower when compared with the same period last year, the official figures show.

Meat & Livestock Australia (MLA) attributed part of the fall in exports from the previous month to lower production due to the effect of rainfall in Queensland and therefore reduced availability of beef for export.

MLA's Chief Economist, Tim McRae, said the downturn in exports to the US was a reflection of the strong Australian currency. Exports in October were the lower monthly total since January 1996 and barely one-fifth of shipments in October 2002, he said.

Russia took over the US as the second-biggest market for Australian beef, with shipments of 9,995 tonnes in October, up 82% on-month and rising six-fold on-year. Exports from January to October totalled 38,436 tonnes, tripling on-year, the official figures show.

Japan remains the biggest overseas beef market with shipments of 27,310 tonnes in October, down 2.0% on-month and 12% on-year. Shipments in the first 10 months fell 3.0% to 290,990 tonnes.

Australia exported 9,679 tonnes of beef to South Korea, up 3.4% on-month but down 10% on-year. Total exports to South Korea in the first 10 months of 2010 reached 99,984 tonnes, up 7.7%.

Among smaller markets, exports to Indonesia in the first 10 months of the year were little changed at 40,355 tonnes, as were exports to Taiwan at 24,813 tonnes.

Australia is the second-largest global exporter of beef after Brazil, with beef exports of around AUD4.5 billion (US$4.49 billion) a year. About two-thirds of Australia's beef output are exported.