September 17, 2020
Australian beef producers rely on domestic market in face of weakening export trade
Australia's domestic beef market is slowly being swamped by products that are meant for export but remain in the country as export volumes continue to decline, Beef Central reports.
The report said that the domestic beef market has been impacted far less than the export trade this year.
"It is our strongest market in the world at the moment, particularly for certain items", analyst Simon Quilty was quoted as saying.
Australian beef exports in August were down 27% year-on-year in terms of volume following a softer 23% decline in the previous month.
In contrast, the domestic beef market was noted to have declined very little in volume compared with pre-COVID levels, the report said.
As per report, retailers have experienced faster beef turnover than before the COVID-19 pandemic despite rising prices since March.
10-15% turnover
One large Sydney retail chain, for example, told Beef Central that its turnover was 10-15% above that of last year.
The report also said that one of the reasons why more beef products are being retained in the domestic market is that Australian exports have become relatively uncompetitive as the Australian dollar has risen 6 US cents, or about 9% against the US dollar. Export markets mostly trade in US dollars. Producers, as a result, put more products in domestic stores.
A large beef processor told Beef Central that between 50 and 60% of their company's weekly production was staying on-shore. The typical domestic share is around 28-30%.
The domestic market, despite its strong performance, still faces the prospect of an oversupply, the report said.
Trade in the food-service sector has been reasonably active but at a reduced level compared with that before the pandemic. A second wave of shutdowns like in Victoria state is seen as a possibility by food-service buyers in other states, in which case they could get caught with unusually high stock, said the report.
