July 11, 2011

Australian beef exporters still face challenges

Despite a jump in the volume of Australian beef shipments to Japan in June, exporters still face difficult conditions, according to marketing company Meat & Livestock Australia Ltd (MLA).

It said a rise in exports to Japan last month was supported by a surge in shipments of lower-value frozen beef to 19,307 tonnes, 21% higher from a year earlier and the highest since November 2010.

"The result reflected the current market conditions in Japan - firm demand for lower-value items particularly from the fast-food sector - on the back of soft interest for Australian beef from other international markets," MLA said.

It said that chilled Australian beef exports to Japan in June rose 5% on year to 12,301 tonnes, but a robust Australian dollar and the price competitiveness of US beef due to a weak US dollar presented a challenge to Australian exporters in international markets.

Combined with the strong Australian dollar, the relatively large shipments from Australia in June meant Japanese importers weren't in a hurry this week to finalise purchases of Australian beef, while the wholesale trade in Japan also remained slow, MLA said.

Beef exports to Japan in June rose to 31,609 boneless metric tonnes, an increase of 3.3% from May and 14% on year, maintaining Japan's position as Australia's biggest beef export market and accounting for 37% of total Australian shipments in June, according to the Department of Agriculture.

Australia is the second-largest global beef exporter after Brazil, with shipments valued around AUD4.5 billion (US$4.8 billion) a year. About two-thirds of its output is exported.