September 19, 2013

 

Australia's beef exports to Japan drop 6%

 

 

Australia's beef exports to Japan declined to a 10-year low last month at 197,632 tonnes, representing a fall of 6%.

 

According to Meat and Livestock Australia's chief economist Tim McRae, growing competition from the US in Japan, a struggling Japanese economy and demand from emerging markets are the main factors influencing the decline.

 

Last month, Australian beef shipments to Japan were down 13% on-year to 24,761 tonnes (shipped weight), which is the lowest level since 2003 - before the US Bovine spongiform encephalopathy (BSE) outbreak.

 

Comparably, shipments of US beef to Japan have increased from 9,240 tonnes in March to 28,056 tonnes in July.

 

McRae said since the change in age restrictions in March on US beef into Japan, the US has been focusing on recapturing market share.

 

Japan's unfavourable economy was also an influencing factor and consumers were looking for a lower-priced product, highlighted by the increase of brisket and chuck roll supplies from the US, McRae said.

 

As a result of this increase of brisket and chuck rolls from the US, Australia's chilled-beef exports to Japan were down 21%, to 8,926 tonnes. However, it was somewhat mitigated by an increase in manufacturing beef, which was up 12% to 10,166 tonnes.

 

McRae said one positive to come from the reduced demand was the fact emerging markets such as China and Korea were importing more beef, capturing product that would have traditionally gone to Japan.

 

So far this year China has imported 93,600 tonnes of Australian beef, compared with 5,600 tonnes at the same time last year, which now placed China as the third-largest beef export market for Australia, McRae said.

 

Beef to Korea has also leaped ahead, with 86,800 tonnes so far this year, up by 23% on-year. Considering that the US and Korea had a free-trade agreement and Australia did not, McRae said that Korean export market was "better than expected".

 

Japan was expected to import less than 300,000 tonnes of Australian beef for 2013, which would be a 5% decline to pre-BSE levels when "Australia and the US competed fiercely for market share".