June 22, 2011

 

Australian cattle sales reduce by export ban

 

 

Australia's AUD500 million-a-year (US$ 530 million) exports of live cattle will drop by 19% because of a controversial termination of Indonesian exports, officials warned.

 

Cattle shipments to Indonesia, the top market, could see ranchers suffer financially.

 

Abares, Australia's official crop bureau, pegged Australian live cattle exports falling to a six-year low of 585,000 animals in 2011-12.

 

The decline reflected an assumption of shipments to Indonesia near-halving to about 220,000 head, following the imposition of a trade ban announced two weeks ago after a television programme showed mistreatment of cattle in the Asian country's slaughterhouses.

 

Footage showed abuse such as a cow, having broken its leg on an abattoir flood, having its tail broken and eyes gouged.

 

The embargo has provoked a polarised response, with some politicians urging permanent bans on all live animal exports, while cattle farmers, warning of job losses, have urged a lifting of the ban

 

Abares highlighted the financial risk to some ranchers, with those in parts of Northern Territory and Western Australia selling more than half their cattle for live export, and national prices potentially to suffer downward pressure as animals originally destined for shipment are sold domestically.

 

"Cattle producers highly dependent on the live cattle trade in northern Australia are likely to suffer financially if the suspension becomes protracted," the bureau said in a report.

 

It also highlighted negative implications for companies involved in the trade, such as port and stevedoring groups, road haulage companies and veterinary enterprises.

 

Nor would Australia make up, in exports of beef, what was lost in live cattle trade, given Indonesians preference principally because of a lack of widespread refrigeration for meat slaughtered locally rather than imported chilled or frozen.

 

"So the prospect, in the short term, of Indonesia substituting imports of Australian boxed beef for live cattle imports is expected to be limited."

 

"Other Asian markets, and Middle Eastern countries, are likely to be able to take some, but nowhere near all of the cattle displaced from Indonesia," Abares said.

 

Such substitution would be limited by competition in Malaysia and the Philippines from South American beef and Indian buffalo meat.