MARKET ACCESS AND TRADE
The primary markets for exported Australian livestock are South-East Asia, the Middle East and North Africa. Other markets include Japan, Russia and Turkey.
SOUTH EAST ASIA
Australia is the main exporter of livestock to South-East Asia, rivalled mainly by intra-regional trade including cattle exported from Thailand, goats exported from Indonesia and beef exported from low cost suppliers such as India, Brazil and Uruguay.
In South East Asia, changes in cattle herd disposition to meet an insatiable demand for meat in China is creating renewed opportunity for exports to the region. From the 1970’s to around 2010, Chinese and Indian cattle flowed south and east to satisfy red meat requirements. Since 2010, cattle movements have reversed with a large draw down on domestic herds in India, Burma, Thailand and Vietnam moving north to China. This has opened up trade opportunities for Australian cattle to the region with exports already flowing to Malaysia and Vietnam and new impetus to complete trade protocols to enable exports to Thailand and Cambodia.
Indonesia is the largest market for Australian cattle, taking 53% of cattle exported in 2013 valued at A$308 million FOB.
In 2013 Vietnam imported 66,951 head of Australian cattle valued at A$54.5 million FOB which was an increase of 1897% on 2012 levels. Cattle exports to Malaysia also increased imports of Australian cattle in 2013, taking 47,620 head, an increase of 45% from 2012. Malaysia was also the largest market Australian goats in 2013, taking 55,398 head or 74% of goats exported from Australia.
Source: Live export trade assessment, ABARES 2014
MIDDLE EAST AND NORTH AFRICA (MENA)
Australia’s share of Middle East sheep market has declined over the past decade as imports from Africa have increased in the region. Despite strong competition from African and European exporting countries as well as inter-regional trade, Australian sheep are preferred in several countries due to the consistent quality and disease-free health status.
In 2013 Australia exported 1,973,418 head of sheep, 98% of which were exported to the Middle East. Kuwait was the largest market in 2013, taking 876,004 head, up 24% on 2012 levels. Qatar and Jordan were also large markets for Australian sheep in 2013, taking 560,762 head valued at A$49.7 million FOB and 287,792 head valued at A$26.6 million FOB respectively.
North African nations are small importers of live animals and the majority of importing nations in the region source animals from nearby nations. Key markets for Australian livestock in the region include Egypt and Libya. The livestock export trade to Egypt was voluntarily suspended by industry in May 2013 following to incidents of poor handling and cruelty. This trade suspension was lifted in March 2014 and during this time, demand was largely met by imports from Brazil.
Old and new market opportunities are emerging in the MENA region (Middle East and North Africa) for sheep and cattle. Industry remains committed to reopening the Saudi Arabian market which has remained closed since the introduction of a regulatory welfare assurance system in 2011. Saudi Arabia currently imports 8 million sheep, goats, cattle and camels each year, 2 million for Haj alone. Much of this product comes from North Africa with a higher disease incidence and lower quality index. Australia offers the Saudi market a high quality, price per kilo value and a disease free product superior in many respects to North African product. Industry estimates that the Saudi market could take up to 2 million head of Australian sheep each year, many of which would be fat tail, composite breeds (dorper, damara) that have been bred in Australia specifically for this market. Industry is working with governments to overcome current impediments to the recommencement of exports but remains committed to reactivating the trade at the earliest opportunity.
Iran also offers the potential of a 1 million head market per year for Australian sheep. Australia had a live export trade with Iran up to the late 1970’s but was shut down at the time of the Iranian revolution. Recent commercial impetus has seen a re-engagement at a Government to Government level which is close to reaching a conclusion and industry expects to see trade commence later in 2014.
Turkey is also looking increasingly likely to restart the trade after it imposed a trade freeze on imports of all livestock. This is a highly competitive sheep and cattle market of moderate scale but an important market in the suite for the region.
Iraq, Algeria, Libya and Morocco are all markets that industry is also working with to complete necessary protocol arrangements that would enable trade to commence.
Source: Live export trade assessment, ABARES 2014
China is Australia’s largest dairy cattle export market, taking 61,906 head in 2013, valued at A$131 million FOB.
Australia does not currently export feeder and slaughter cattle to China, despite strong commercial interest in developing a trade.
Russia is a key emerging market, especially for feeder and slaughter cattle. Australia has consistently exported beef breeders and dairy cattle to Russia since a market access agreement was reached in 2007. Between 2011 and 2014, Russia has increased its import of beef breeder heifers to approximately 30,000 head annually, with dairy heifers around 5,000 per year over the same period. Public policy decisions by central and regional governments in Russia to improve domestic herd numbers and genetics are the key drivers behind the export demand.
As a result of Schmallenburg virus issues in Europe, Russia has shut most European suppliers of dairy heifers out of the market which has impacted positively on demand for Australian dairy heifers. In addition, in August 2014 Russia imposed sanctions, restricting the import of a number of agricultural products (including beef and dairy) from various western trading partners including Australia.