By Matt Dalgleish | Source: DAWR, Mecardo.
This article is bought to you by Feedworks.
The release of Department of Agriculture and Water Resources trade statistics for March shows that China continues to outperform South Korea in beef export consignments during the first quarter of 2019, cementing their third-place position as an export destination for Australian beef product.
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The first quarter of 2019 has seen an 11.5% increase on beef export flows compared to the 2018 season and the highest average monthly shipments recorded since 2015 at just over 88,000 tonnes per month, which represents a level 4% higher than the five-year trend – Figure 1.
The surge in beef export flows this season has been aided by a 5% lift in consignments to Japan and a 7% gain in shipments to South Korea, compared to the five-year trend. However, the real driver behind the strong result so far this year has been the 80% jump in Australian beef exports to China. Flows to the USA are 16% higher than in 2018, but 16% below the five-year trend due to the exceptionally high flows recorded during the 2014/15 seasons – Figure 2.
Analysis of the annual market share for Australia’s key beef export destinations highlights that China has outperformed South Korea to capture the third top spot at 19.6% of the export market share and is closing in on the second place position of the USA with 21.8% - Figure 3.
The first quarter of 2019 has seen the average monthly flow of Australian beef product to China peak at 17,277 tonnes, eclipsing the previous record set in 2014 of 12,446 tonnes.
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China has been impacted by the spread of the African Swine Flu epidemic this season, hitting pork production there particularly hard, with estimates of up to a 30% drop in domestic production levels likely.
Key points
* Beef export volumes for the first quarter of 2019 have increased 11.5% on the 2018 levels, although only 4% above the five-year average.
* The flow of Australian beef to the USA is 16% below the five-year trend. However, the five-year average level was given a boost by very high volumes during 2014 and 2015.
* Significant expansion of demand has been noted from China, with quarter one consignments sitting 80% above the five-year trend.
What does this mean?
Demand for red meat protein had already been on the rise on the back of an expanding Chinese middle class, supporting increased beef exports from Australia since the June 2018.
However, the prospect of a pork shortage due to domestic Chinese production woes and damaged US-Chinese trade negotiations, that is limiting the competitiveness of US pork imports, could continue to have positive implications for Australian beef exports as the season progresses.
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