Rabobank predicts a tough year for Australian beef exports
Australia's domestic cattle prices are to set at 15% lower than 2017 and the decline will be seen in the producers' income for this year, predicts Angus Gidley-Baird, Senior Analyst - Animal Protein at Rabobank.
The latest analysis released by the bank confirms an earlier Meat&Livestock Australia (MLA) forecast of 3% increase in slaughter and an overall increase in production of 3% thanks to the steady average slaughter weight.
Nevertheless, "global markets are not expected to provide much upside support, as Australia faces increasing competition in key export markets over the course of the year", said Angus Gidley-Baird.
One of the strongest competitors is Uruguay, the only South American Nation that has access to many of Australia’s key markets, with the exception of Japan and Indonesia. Also, the competition for the Chinese has increased lately with Argentina and Uruguay shifting their beef exports from Russia to China over the last 4 years.
"This isn’t forecast to change, with China likely to continue to be the main destination for both Argentinean and Uruguayan beef in the coming years", mentioned a snapshot published by MLA.
Compared with Brazil or India beef quality or market sanitary status, Argentina and Uruguay have a serious advantage and that could represent a greater risk for Australia in some markets.
In fact, China's direct beef imports for the last two years shows that Uruguay has already a bigger market share than Australia in this country.
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