Despite a further contraction of Australian beef exports in April and a continued strong currency, there is a strengthening of demand signals as seen in increased buying from Russia and South Korea during the same month, said Meat and Livestock Australia (MLA).

 

The Department of Agriculture, Fisheries and Forestry reported Monday (May 3) that Australian beef exports in April fell 8.3% from March to 74,753 boneless tonnes, a 7.4% decline from April last year. Exports in April took shipments in the first four months of this year to 263,121 tonnes, down 12% from the same period last year.

 

The country's beef exports continued to track below-year-ago levels, with April shipments the eighth consecutive monthly on-year decline, as the reduced supply of cattle continues to limit output, said the report.

 

In the calendar second half, domestic beef production is expected to increase, as producers start to sell more cattle, fattened on pastures throughout eastern Australia that were rejuvenated by widespread rainfall earlier this year.

 

The improved beef supplies should help increase Australian beef exports, especially if the forecast improved global economic outlook in key export markets and better beef demand signals prove accurate, the report said.

 

Russian imports of Australian beef collapsed in 2008, but now, in the face of restricted supplies from South America, primarily Argentina, interest in Australian beef has been rejuvenated, with Australian exports to Russia reaching 4,107 tonnes in April up from 1,151 tonnes in March, with April the highest monthly total since September 2008.

 

Russia has the potential to take large volumes of meat, such as in 2008 when it imported 72,000 tonnes of Australian beef, according to the report.

 

Exports to the US continued to languish in April, with 16,605 tonnes shipped, up 1.1% on-month but down 3.6% on-year. Exports to the US in the first four months of this year of 57,458 tonnes fell 42% on-year.

 

Despite the export price of Australian 90CL beef jumping 27% this year, Australian exports to the US continue to track below year-ago levels, reflecting tighter cow beef supplies and increased competition from other markets for manufacturing beef, including the re-emergence of Russia since March, MLA reported.

 

Japan remained the biggest overseas beef market in April. Shipments in the first four months of this year to Japan of 113,585 tonnes rose 0.9% on year.

 

In South Korea, despite the increased presence of US beef this year, demand for Australian meat has remained relatively strong. Beef exports to South Korea in the first four months of 2010 reached 35,345 tonnes, up 12% on-year.

 

Australia is the second-largest global exporter of beef after Brazil, with beef exports valued around AUD4.5 billion (US$4.08 billion) a year. About two-thirds of Australia's beef output are exported.