China to play significant export role

18 Jul, 2016 02:00 AM
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People in China recognise Angus as a high quality breed

SHORT supply of cattle and high prices appears to have slowed momentum on the live trade of slaughter and feeder cattle to China.

However, substantial investments in feedlots and abattoirs and shipping capacity are still being made and protocol paperwork is underway.

Live exporters believe the doors will open in a significant way within 12 months and say China is a market that will change the face of the trade.

Not only will China fuel the sourcing of live trade cattle from southern areas but it will provide flexibility to better meet cattle availability and improve shipping efficiencies.

Since the signing of the China feeder/slaughter cattle protocol mid-last year, three airfreight consignments of about 450 head have been exported, two by Elders and one by Frontier International.

The China health protocol is relatively complex compared to other similar live trade protocols, with requirements dependent on a number of factors related to the type of animal, sourcing region within Australia in relation to bluetongue disease zones and destination regions in China.

Meat and Livestock Australia said there are also on-going discussions happening with Chinese certifying officials on preparation requirements but this is outside the protocol.

Elders International general manager Cameron Hall said work on the investment in feedlot and abattoir facilities in China was continuing and many were being inspected by local provincial governments.

Once those inspections was finalised and approval provided, respective Australia exporter organisations would get Exporter Supply Chain Assurance System (ESCAS) audits underway.

"People are working through the processes diligently," he said.

"It is expected shipments will start in the next 12 months and once they start, I suspect we will see reasonable regularity around shipments occurring.

"We need to get through this particular window of short supply and high livestock prices in Australia first."

Mr Hall said China would certainly open doors to southern cattle going into live export markets.

"People in China recognise Angus as a high quality breed," he said.

"But not all segments will chase marbled or high-end beef - there will be a range of breed types and types of cattle accepted.

"Having this market open is another important cog in how the industry works, particularly in that it provides a market for different times of the year to accommodate livestock availability.

"Being a bit further away, the China market will also employ vessels for a longer period of time than, say, Indonesia and having that mix helps with the flexibility of businesses and allows for better balancing in times of short supply."

Manager of Elders-owned exporter North Australian Cattle Company Patrick Underwood said China was the "big thing" for live exporters.

"The million dollar question is if and when the China market will open,'' Mr Underwood said.

"We have ESCAS in place and customers but there has been a lot of government-to-government negotiations under the the protocol.

"Six months ago we would have thought it would have been open and operating by now but one thing for sure is a lot of investment has gone in up there with big feedlots completed and some big abattoirs built in preparation for Australian cattle.

"Industry leaders in Australia said commercial players were in discussions with their Chinese counterparts.

The complex protocol involved and the very tight cattle supply situation were combining to make the trade difficult but if there was commercial viability the trade would start and grow steadily, they said.

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FarmOnline
Shan Goodwin

Shan Goodwin

is the national beef writer for Fairfax Agricultural Media.

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