March 8, 2010

Japan and South Korea buy less Australian beef

A lack of beef supply in Australia has caused difficulties in capitalising on solid demand from South Korea and Japan, resulting in lower trading.

South Korean beef importers are demanding large quantities of clod, chuck and point end brisket, but Australia's low beef supply and recent strong interest for trimmings in other markets is diminishing the offering of these items.

Beef exports from Australia to South Korea declined 10% to 7,505 tonnes swt in February, with 2,325 tonnes swt consisting of chilled beef products. The lack of Australian grassfed beef has triggered improved interest in grainfed beef in South Korea – increasing 33% on last month and up by 47% in the calendar year to February compared with 2009.

Japan imported 28,563 tonnes swt of beef during January, a decline of 22% compared with the same period in 2009. The decline in imports was largely due to a tight supply of beef from Australia, combined with the high Australian dollar and Japan's stagnant economy.

Australia's frozen beef exports to Japan declined 31% on-year during January to 11,773 tonnes, while chilled shipments dropped 7% to 10,486 tonnes. US beef exports to Japan increased 108 tonnes or 3% on-year to 3,916 tonnes, with chilled volumes down 14% to 1,703 tonnes as frozen volumes increased 21% to 2,213 tonnes.

Australia shipped 26,581 tonnes swt of beef to Japan in February, down 11% from the same period in 2009. While interest from Japan and some prices for Australian beef improved during the month, the extensive rain across the eastern states kept cattle supplies very tight, limiting processing volumes. Export prices of frozen briskets and CL items continued to lift in both US and Australian dollar terms, reflecting low stock levels in the market.

Both chilled and frozen exports to Japan fell 12% to 12,798 tonnes, and 9% to 13,783 tonnes year-on-year, respectively.