CONFIDENCE remains high in Australia’s live export sector, despite exporters enduring some of the most difficult economic conditions in the industry’s history.
However Australian Livestock Exporters’ Council (ALEC) chairman Simon Crean said further investment was needed in productivity, traceability and infrastructure to mitigate the impact of high prices.
Mr Crean spoke at the Pastoralists and Graziers Association of WA’s (PGA) annual convention at Crown Perth last Wednesday, highlighting the challenges and opportunities facing Australia’s live export industry.
He said the $2 billion industry had been significantly impacted by high red meat prices, which was affecting all parts of the supply chain and resulting in major trade disruption.
According to the Meat and Livestock Australia’s (MLA) Livecorp monthly trade summary, Australian cattle exports dropped 26 per cent in the 12 months to the end of August.
Exports to Indonesia dropped 22pc in that period, a supply chain disruption Mr Crean described as comparable to the live export ban of 2011.
Despite this, Mr Crean said he was hopeful the Indonesian market could be recovered.
“The Australian government continue dialogue with Indonesia directly, both with their industry and their government, to address key issues around breeders, cattle quotas, permits and price impactors,” Mr Crean said.
“The Indonesia Australia Closer Economic Partnership (IA-CEPA) could provide a platform for certainty into the future.”
Live cattle exports to Vietnam – Australia’s second largest live cattle market – also dropped 28pc in the year to the end of August, while exports to Malaysia dropped 54pc.
Mr Crean said despite difficult market conditions, there was positive trade news thanks to development in the Chinese cattle market.
“Since the historic first sea-bound slaughter shipment of Australian cattle was exported in February, high cattle prices have prevented any further trade activity,” Mr Crean said.
“But on the back of a more recent softening of cattle prices, Wellard’s announcement last week of its first China shipment is positive news, it’s an important next step for the emerging market.”
In the live sheep market, Mr Crean said optimism remained high despite tough market conditions, as new markets opened up in the Middle East and negotiations to reopen trade with Saudi Arabia continued.
Live sheep have not been traded into Saudi Arabia since 2012, due to concerns Australia’s Exporter Supply Chain Assurance System (ESCAS) would impose on its sovereignty.
“Saudi Arabia remains a major focus for us in reopening the trade for live sheep, this must be done in a way which upholds ESCAS requirements,” Mr Crean said.
“There have been productive developments at a government and an industry level, with the basis for a solution having been laid.
“We’re also focused on growth in other markets, the single largest recipient of sheep in August was Turkey with just over 78,000 head shipped, the last time Australian sheep was supplied to Turkey was back in 2013.
“For the processing sector both progress on the EU-Australia Free Trade Agreement and the consequences of Brexit open new opportunities to improve quota into those markets.”
Mr Crean said although high prices created several market challenges, animal welfare was the most significant threat to the industry.
He said animal welfare had to remain an investment priority in order for live animal trade to continue out of Australia.
“Australia is the largest live exporter, there are more than 100 other countries that compete with us for that trade but we are the only country which imposes strict animal welfare practices,” Mr Crean said.
“This of course does put us at a competitive disadvantage, but for us animal welfare is not negotiable.
“The biggest budgetary commitment from LiveCorp/MLA’s Livestock Export Program is on animal welfare and collaborative programs have delivered training to 11,000 supply chain participants across our international markets.
“We’ve also called successfully for a Federal review of the Australian Standards for the Export of Livestock (ASEL) and we are engaged in ongoing dialogue with the Australian Government Accredited Vets, something we will continue at LIVEXchange, here in Perth in mid-November.
“We also continue to work with the Federal government to reduce regularity costs without compromising the accountability of our industry.”
