RI key to Australia's live cattle exports

RI key to Australia's live cattle exports

SYDNEY (Reuter): Australia's meat industry statutory authority, the Australian Meat and Livestock Corp (AMLC), said in its latest monthly market review live cattle exports, mainly to Indonesia and the Philippines, were the major factor ensuring the viability of an otherwise struggling northern cattle sector.

Australia's booming A$350 million a year live cattle export trade jumped 42 percent in calendar 1996 and is forecast to climb about 23 percent in 1997.

AMLC official Julia Schick predicted Australia's cattle exports would grow to 890,000 head in 1997 from 723,000 in 1996. The Asian component, sourced from northern Australia, was expected to reach 710,000 head in 1997.

Australia's cattle exports in 1996 rose by more than 200,000 head on 1995 and in value terms grew by 34.4 percent to A$344.50 million.

Indonesia is seen remaining the main force and increasing imports by 70,000 to 450,000 head in 1997, AMLC said.

"This alone is greater than the total number of live cattle exported by Australia in 1994," Schick said.

"Indonesia's population of 195 million (means) even a small rise in per capita consumption of beef will inevitably have a flow-on effect for live cattle and beef import demand. A continued rise in per capita consumption is likely to increase demand for both live cattle and beef from Australia," she said.

Accounting for 52 percent of Australia's total cattle exports, Indonesian demand is a result of higher per capita income and a growing middle class with larger disposable income.

Increased consumption of beef in Indonesia and elsewhere in Asia is seen as also boosted by a reduction in Asian herd numbers as farmers took advantage of higher cattle prices.

It was further aided by tariff reductions in several countries.

Indonesia lifted limitations on imports of feeder cattle in 1989 and does not subject them to import tariffs.

In contrast to Indonesia's continuing growth prospects, the Philippines, Australia's second-largest cattle market with imports of 203,010 head in 1996, is seen as having plateaued.

This is seen as resulting from removal of official requirements that breeding cattle comprise 10 percent of imported cattle, competition with imported buffalo meat and higher imports of chilled and frozen product from Australia, New Zealand and the U.S., AMLC said.

AMLC sees the Middle East and North Africa as prospects for big new markets for Australian cattle.

First substantial Australian cattle exports to Egypt began in 1995 following the reduction in EU subsidies and reached 49,300 head in 1996.

Libya, Jordan, Lebanon, Israel, Mauritius and Middle East Gulf countries also imported rising numbers of Australian cattle in 1996.

With EU subsidies cut by 10 percent to 116 cents a kg, Australia was competing viably in the Middle East and North Africa, it said.

"Libya is emerging as a new market in this area, with the potential to import up to 100,000 head from Australia in 1997," Schick said.

"Egypt may also import over 80,000 head.

"However, these markets will again lose viability ... if EU subsidies are raised to previous levels and bans (on imports from Ireland because of BSE disease) are lifted," AMLC said.