Bahrain is back

That's the news from Agriculture Minister Barnaby Joyce, who has revealed the Australian and Bahraini governments had reached an agreement on all government requirements for the trade to resume.

Mr Joyce made the announcement at the Broome Beef Forum on Saturday.

"It's great news for Australian sheep producers, particularly those in WA where most live sheep for export are sourced," he said.

"The Bahrain market could take about 400,000 head each year at its peak.

"With that we start to underpin the market in the South West and the wheat-sheep belt starts to get a real second string to their bow."

Mr Joyce was confident WA could meet the demand of the new market, despite shrinking sheep numbers in the State.

"There is never a better indicator than price and once that price is right they (producers) jump back into the space and start delivering," he said.

Mr Joyce admitted it could still be some time before sheep are exported to Bahrain and said it would take time to restart the trade.

"Exporters can now work to re-establish the Exporter Supply Chain Assurance System (ESCAS) supply chains if they choose," he said.

"I appreciate this may take some time yet, but I am hopeful trade will start to flow soon."

The Australian Government has been working with Bahrain to develop new animal health requirements following an incident in August 2012 when Australian sheep exported to Bahrain were not unloaded on arrival due to concerns about scabby mouth.

Under the new health protocol Bahrain has provided specific assurances on that disease and the Bahraini government has also provided assurances about the unloading of Australian sheep.

Australian Live Exporters Council (ALEC) chief executive officer Alison Penfold said the trade re-commencement with Bahrain could signal a turnaround for the Australian sheep industry.

She said it was a huge blow to sheep producers when the market was suspended.

"It is very clear to us just how important it is to have trade with Bahrain up and running," Ms Penfold said.

"Bahrain is one of those markets we have been exporting to for well over 30 years and it will give more opportunities for sheep producers and we hope it will be a turnaround for the sheep trade."

Ms Penfold said it was difficult to say when the first sheep would be sent to the market as there were a number of commercial and ESCAS-related processes exporters were yet to go through.

But she said it was a positive that things were now in place so that could occur.

"The frame-work around which the trade can operate is now in place and it is a matter for individual exporters to put their own arrangements in place," she said.

Wellard Rural Exports chief executive officer Fred Troncone said it was fantastic news for the industry and for producers that Bahrain was open for business.

But he said it would take time before trade resumed as ESCAS regulations needed to be met and the supply chain would need to be re-audited.

Mr Troncone said many exporters, including Wellard, would be weighing up the risks associated with entering that market.

"The major issue of the incident in 2012 which saw the suspension of the trade was that there was a Memoranda of Understanding in place which required Bahrain to discharge the vessel, and they didn't," he said.

"That incident was expensive for Wellard and for the Bahrain Livestock Company.

"So the commercial players are operating cautiously even though there have been assurances provided by our government and by the Bahraini government."

Mr Troncone said the terms of trade between the two countries had also changed and it was unlikely those terms of trade would suit a company like Wellard.

Emanuel Exports managing director Graham Daws said any increase in demand was healthy for industry and for Australian producers.

But he said there was no telling when the trade might actually start given the large amount of red-tape required through ESCAS.

"Part of the ESCAS requirement is the supply chain has to all be re-audited and re-checked, but they haven't had sheep for 18 months so how are you supposed to do all that," Mr Daws said.

"There is nothing to audit, it's the chicken and egg scenario.

"If they haven't got livestock there, what is there to audit.

"It's typical that the regulations make life extremely challenging and frustrating."

WA Farmers meat section president Jeff Murray said having Bahrain back in the game was a very good outcome for the industry.

Given Bahrain was once one of WA's major markets he said it would put a lot more competition back into the market place.

"ESCAS requirements will still have to be met and the facilities will have to re-audited but the Bahrainis have taken our sheep under ESCAS before so there is no reason why they would not be compliant," Mr Murray said.

"It will put a lot of strength back in the market."

Despite falling sheep numbers in WA, Mr Murray was confident WA producers could meet the increase in demand from Bahrain, provided the price was right.

"We would need around $100 a head to keep producers in the game," he said.

"Since we lost the Bahrain market and the prices have dropped off on the live export wethers it has been fairly unprofitable for sheep farmers and a lot of them have turned to alternative land uses.

"If we see Bahrain back up to the levels it was before, it is a lot of sheep, but providing producers are getting good prices they will be able to keep up with supply."

Mr Murray said he hoped this would signal a turnaround in the sheep industry in WA.

"Cattle are going along pretty well at present and sheep numbers have been languishing lately," he said.

"But the signals for sheep meat are strong, there is strong demand for it in China, EU and the US, so they are all good signs."

Pastoralists and Graziers Association (PGA) livestock committee chairman Digby Stretch said he was pleased to see Australian was re-entering an important market.

He said he hoped it would signal an improvement in prices for sheep producers in WA.

"There is an expectation that another outlet would put more competition in the market place and we have been sourly missing that over the last year or so," Mr Stretch said.

"I would like to see the prices return back to the levels they were at two or three years ago.

"Things are working with prices where they are at the moment, but only just.

"This will make the whole thing a more robust enterprise and put sheep back up on level footing with other options for those paddocks.

"It is encouraging we are getting those doors re-opened."