CATTLE exports to Australia's main market, Indonesia, have taken a pandemic-related dip but demand from other customers has more than made up the gap and overall volumes are only back one per cent on 2019 levels.
The latest industry figures show cattle exports in June totalled 124,000 head, which is the largest volume of cattle shipped since November last year.
Volumes to Indonesia were down 16pc year-on-year until June, with Singapore-based Rabobank senior animal protein analyst Ben Santoso saying several issues were driving this.
"Inventory of buffalo meat was still high at the beginning of the year, followed by drop in demand during large-scale social distancing measures in April - some festivities where beef is usually consumed were not allowed," Mr Santoso said.
"Slaughtering businesses were also left with accumulating by-products that had no takers - hide for the apparel industry and offal for the foodservice sector.
"And the feedlotter margin was hit by a depreciating Rupiah and lower offtake due to a drop in demand."
Mr Santoso said the situation in Indonesia had gradually improved since May but a return to pre-Covid demand this year was not expected.
Rabobank is forecasting Indonesia's feeder cattle imports to decline by 15 to 20pc year-on-year in 2020.
Australian Department of Agriculture data shows Indonesian feeder exports were down 12pc year-on-year, at 251,354 head, for the first six months of year.
Mr Santoso said Indonesian feedlots took advantage of lower prices and the stronger Rupiah-verses-Australian dollar to refill in May and June, along with cheaper corn silage from the main harvest season. However they are not full and this buying may not continue as those drivers reverse, he said.
"Plus we have continuing imports of Indian carabeef, which for the moment remains slower than normal. A key gauge of demand will be for Idul Adha slaughtering (for local and some non-castrated Australian steers) on 31 July," he said.
Exports to Vietnam, meanwhile, are up 48pc year-on-year for the first six months of the year.
Analysts said African Swine Fever had seen pork prices rise enough to incentivise beef consumption and support imports in countries like Vietnam and China.
Australian Live Exporters Council chief executive officer Mark Harvey-Sutton said Vietnam was a growing market for Australian live exports with the fact our cattle yield well and provide good local employment a key driver.
"The figures also show growth for dairy heifer exports, with most going to China, highlighting their importance as an alternative cash flow for milk producers," he said.
The robust volumes exported this year highlighted the live trade industry's role in underpinning the prices of livestock in Australia, he said.
Meat & Livestock Australia's latest cattle market projections say the demand fundamentals supporting beef consumption in Australia's cattle markets remain strong.
However, many markets across South East Asia remain price-sensitive, which will continue to challenge the trade in light of the current supply outlook and elevate the threat of increased competition from low-cost competitors, MLA analysts reported.