Kuwait is building alternate sheep market

Kuwait is building alternate sheep market

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It also signed a five "preferential procurement off-take agreements" with farmers in the Eastern Cape region.

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AUSTRALIA'S largest buyer of live sheep Al Mawashi, Kuwait, is looking to secure more sheep from South Africa after establishing an office in East London last year and recently signing five "preferential procurement off-take agreements" with farmers in the Eastern Cape region.

Al Mawashi chief executive officer Osama Boodai said the company was "looking beyond Australia for potential new livestock suppliers" and "South Africa has emerged as a new source" for the company, "given the quality of sheep the country has to offer".

The decision to look elsewhere for sheep stocks began when the Australian Government and Independent Regulator of live exports placed tighter restrictions on live sheep exports in 2018 causing disruption to supply for the Gulf States.

The self-imposed and now regulated three-month moratorium on live sheep exports to the Middle East during its summer months has also impacted the ability of the company to source sheep from Australia 12 months of the year.

Last year Al Mawashi reported its first trial run of live sheep from Romania and South Africa, which were both successful and gave the company the ability to meet the demand for live sheep during its festival seasons.

Mr Boodai said the decision to source livestock from the Eastern Cape region was also due to recent measures taken by the South African government to "simplify business procedures".

The company is said to have set an ambitious target of building its South African business to turn over AU$95 million per annum by the end of 2025.

The off-take agreements were seen as a first step in achieving that goal, allowing for the preferential procurement of 25,000 to 75,000 head of sheep valued between $2.8m and $8.5m over the next three years, on the condition that farmers met the specifications of live export.

Company officials had made a string of visits to South Africa last year, which set in motion the completion of the first live sheep shipment from the country in November.

It's second shipment of sheep on the Al Messilah left East London Port last week headed for the Persian Gulf which is expected to arrive in Kuwait within 14 days.

Al Mawashi has also built the largest feedlot in Southern Africa, 40 kilometres outside the Port of East London in order to prepare the sheep for travel and market.

The investments and procurements are said to have injected about $14m into the Eastern Cape's regional economy in less than 12 months.

The diversification of country of origin is of concern to WA sheep producers who have warned that a loss of business to the trade could impact farmgate prices due to a lack of competition in the market.

About 20-30 per cent of the WA sheep turn off each year makes it into live export markets.

p LIVE sheep exports from Fremantle Port are down 58 per cent year to date, compared with the first two months of 2019.

Just 108,225 sheep were exported through the port, mainly to the Middle East, but our three largest markets of Kuwait, Qatar and Israel, so far for 2020, have only received 32,261, 55,000 and 8964 respectively.

Rural Export and Trading WA (RETWA) exported a consignment from Fremantle a fortnight ago on the Ocean Shearer and this week via the Al Shuwaikh - which will improve trade figures which are currently unavailable.

Other exporters have reportedly been active in the market.

The Al Shuwaikh left Fremantle Port on Monday night with its single deck, typically used for cattle, empty for the second time since RETWA was granted an exemption to Marine Order 43 which came into effect on January 1.

The order was to restrict twin-tier vessels from working in Australian waters -however the company was able to get the exemption on the basis that it would work towards an alternative, which it has in the purchase of the Ocean Shearer from Wellard for about $89.8 million.

It is expected the company will continue to use the Al Shuwaikh in the future but if it is not being totally utilised then that could change.

The company is said to lose about $1m every time it departs WA without being able to load the single deck on the vessel.

There were a lot of angry backbenchers within the Liberal and National ranks after last month's decision to refuse the company the ability to load the single deck.

Federal Member for O'Connor Rick Wilson has led the group seeking for a swift resolution to the problem, but Farm Weekly understands that while Federal Parliament is not functioning as normal due to the COVID-19 measures, the issue has not been resolved and it may take some time.

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