LIVE export sheep prices could come under pressure next year after a livestock supply agreement was signed between Saudi Arabian Prince Al-Waleed Bin Talal and the president of Sudan.
The agreement allowed the Saudi Arabian Prince and businessman to have sole rights to import Sudanese livestock into Saudi Arabia for the next five years.
While the new agreement would make other Saudi Arabian live sheep importers seek livestock elsewhere - including Australia - the impact of the agreement would more likely put pressure on Australian live export sheep prices.
Meat and Livestock Australia manager of overseas operations Mike Hayward said the agreement would make Sudan a more effective competitor.
"It certainly signals the commitment of a significant businessman from the Saudi Arabian royal family to that trade," he said.
"It means pressure on prices will be greater because you have got another source of supply in the market."
Mr Hayward said fat-tail and long-tail sheep provided by North African countries were preferred over the Merinos, which would also add to the pressure on prices.
However, he said countries like Sudan also had limited supply and did not have the same scale of live exporting infrastructure as Australia.
Sudanese sheep were usually transported in smaller vessels.
Under the five-year agreement Sudan will supply at least 3.5 million sheep, as well as additional cattle and camels, to Saudi Arabia each year.
In the 2001-02 fiscal year Saudi Arabia took 2.1 million sheep or 32pc of Australia live export sheep valued at an estimated $128m.
Australia's increased exports to Saudi Arabia in the past financial year had been assisted by lack of competition from North African countries due to outbreaks of Foot and Mouth Disease and Rift Valley Fever.
However livestock from North African countries such as Ethiopia, Sudan and Somalia had been allowed back into Middle Eastern livestock markets.
Mr Hayward said he was surprised that the dropping of restrictions on livestock from North African into Middle Eastern countries had so far not affected Australia's live export growth in the past calendar year.
Australian live export sheep exports to Saudi Arabia and Kuwait - Australia's other major live sheep market - were so far 3pc higher than last year's total.
However, in the past month there had been a 2pc drop for Saudi Arabia and a 26pc drop for Kuwait. But both markets were expected to increase from now on with the approach of the Haj.
WA Livestock Exporters Association chairman Alastair Moore said that it would be tough going next year due to expected low lambing rates nationally.
He said the live export sheep industry needed 90pc lambing rates to maintain present markets, although a 70pc lambing rate looked more likely.
However, he said lambing rates in WA might not be as bad as in eastern Australia. "There is going to be a shortage of some sheep," he said.
So far this year 53pc of Australia's live export sheep were from WA.