By Matt Dalgleish | Source: DAWR, Mecardo.
The release of Department of Agriculture and Water Resources (DAWR) beef export trade statistics for January highlights a promising start and, although it is early days in the season, the market share of the key destinations suggests an interesting year ahead.
Beef export trade volumes for January 2019 came in at 67,590 tonnes swt, the highest start to the season since 2014. This represents a gain of 11% on January 2018 and 10% above the five-year seasonal trend for January (Figure 1).
Bearing in mind that the five-year average includes the 2014/15 seasons, which saw a huge upswing in beef demand for Australian exports into the USA, the figure released for January 2019 is rather impressive. Indeed, adjusting the five-year average to remove the 2014/15 outliers and calculating the average back to 2012 shows that the January 2019 volumes are 24% higher.
A summary of the trade volumes to Australia’s key beef export destinations in recent years shows how uncharacteristic the US demand was during the 2014/15 period. The last three years January volumes to the USA are yet to eclipse the five-year average, despite registering an increase each year since 2017 (Figure 2).
US imports of Australian beef for January totalled 11,529 tonnes in 2017, 12,734 tonnes during 2018 and 13,611 tonnes for this year. This is still well short of the five-year average for January of 16,150 tonnes swt, which was boosted significantly by the 16,848 tonnes recorded in 2016 and the whopping 25,809 tonnes registered during 2015.
Further analysis of the trade flow destinations for beef exports in January indicate that the Chinese and Japanese markets have been driving the surge so far in 2019. Australian beef exports to Japan are up 16% from 2018 levels and sitting 31% higher than the five-year average, while China recorded stellar growth with the highest January volume on record at 12,155 tonnes. This is 52% higher than January 2018 and 86% above the five-year average for January.
Key points
*January beef export levels are 11% higher than last season, supported by significantly above-average growth in demand from China and Japan.
* Japanese demand for Australian beef exports during January 2019 came in 31% above the five-year January average and Chinese demand was 86% higher than average.
* Chinese market share of Australian beef exports for 2019 is sitting in third place, eclipsing South Korean flows for January, at 18% of total Australian beef exports.
What does this mean?
Granted we are just one month into the 2019 season. However, the summary of annual market share for Australia’s key beef export destinations highlights that China (at least for the moment) has leapfrogged South Korea to hold the third top spot at 18% of the export market share and isn’t that far off the USA position in second place with 20% (Figure 3).
It remains to be seen if Chinese demand for Australian beef exports can be sustained at these record levels for the rest of the 2019 season, but we will be watching and reporting on it as the season progresses.
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