December 30, 2003

 

 

More Japanese Inquiries For Australian Beef

 

Australian beef exporters have reported more inquiries from Japanese buyers, but industry sources say it is too early to tell what the actual fallout will be from the discovery in the U.S. of a single case of mad cow disease.

 

Allan Teys, chairman of the Australian Processor Council and a director of major beef processor and exporter Teys Brothers Holdings Pty., confirmed his company has taken some calls from Japan.

 

"They're concerned about supply at this stage," he told Dow Jones Newswires, adding that he doesn't know the situation with other exporters.

 

There have been some media reports quoting other exporters telling of increased inquiries from Japan.

 

But the problem facing Teys Bros., along with the wider industry, he explained, is that many processing plants are closed for holidays, so there is little contact with customers.

 

"There's really not very much I can add," he said.

 

"We're not selling any meat at the moment so consequently I wouldn't know" about any impact on beef export prices, he said.

 

He was commenting after a host of countries, including key markets in North Asia, notably Japan, South Korea and Taiwan, effectively banned the import of U.S. beef following the discovery. Taiwan announced Tuesday a 7-year ban on imports of beef products.

 

Australia and the U.S. usually compete vigorously to supply these countries with beef, while the U.S. is Australia's biggest beef export market by volume.

 

Australia exports about two-third of its beef in trade that last fiscal year was worth A$3.75 billion.

 

Import bans began a week ago when the U.S. Department of Agriculture announced that a brain sample of a Holstein dairy cow from Mabton, Washington, had tested positive for mad cow disease, also known as bovine spongiform encephalopathy, or BSE.

 

Peter Barnard, general manager, economic planning and market services, at marketing concern Meat & Livestock Australia Ltd., said he understands from press reports a delegation of Japanese officials will visit Australia early next month to discuss supply issues.

 

As for beef demand in the wake of the BSE discovery, Barnard said he understands it is holding up well in the U.S. and Japan.

 

As for any impact on beef export prices, "if there has been, I haven't heard," he said Tuesday, after speaking extensively with exporters Monday.

 

"At the moment, it's minimal impact," he said.

 

Meanwhile, a 25% surge over 2 days in the share price of major beef producer and exporter Australian Agricultural Co. ended Tuesday, with the shares closing 1 cent lower at A$1.28.

 

Peter Holmes a Court, the company's chief executive, said he is watching the overall situation closely, but the effect of the outbreak on demand won't be known for some weeks.

 

"As the majority of processors are closed, we will have to wait until the second week of January to see how prices are going to trend," he said in a report in the Australian Financial Review newspaper.

 

"It is unclear how the markets will react early in the new year," he added.