Dollar and oil dampen live exports

28 May, 2008 10:51 AM

THE high dollar and increasing oil prices have been blamed for a major reduction in orders for the annual supply of Australian sheep to the religious festival, the Hajj.

It is believed there have been no tenders awarded for Australian sheep in the first round of supply contracts for the festival.

It is also understood Australian exporters were outbidded by exporters from Uruguay, Romania, China and Somalia for the contract.

Exporters have said the lack of interest in Australian sheep was due to a number of factors, but the high dollar was cited as a main contributor.

Wellard Rural Exports is one of the first exporters to release its forward contracts for the coming year and live sheep manager Garry Robinson said the highest Australian and US dollar exchange rate in 25 years, record high oil prices and ever increasing compliance costs were impacting on Australia’s competitiveness in Middle Eastern markets.

As opposed to last year where lambs of both sex and all breeds, as well as wether lambs could be contracted, this year Wellards are only contracting ram lambs with a minimum weight of 35kg to line average 38kg at delivery.

The contract price is $55 a head delivered.

"While the market in general remains strong, Australia’s ability to remain a prominent force has been driven by its quality and large framed animals providing a better return on a dollars per kg basis than local and imported types," Mr Robinson said.

"As the Australian sheep flock changes to a younger lighter animal our ability to compete is being eroded."


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