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 Russian market red hot 

Russian market red hot

11 Nov, 2010 03:00 AM
SURGING beef shipments to the Russian and the Middle East markets are helping exporters replace flagging demand for red meat from the US and Japan.

Exports of Australian beef to Russia have increased 258 per cent since the end of 2009 and shipments to the Middle East are up 58pc, according to figures from Meat and Livestock Australia (MLA).

That contrasts with a 25pc drop in exports to the US and a three per cent reduction in Japanese consignments – the two markets traditionally at the heart of the Australian export sector.

The redistribution of exports is largely down to the strong Australian dollar, says MLA economist, Tim McRae.

“The dollar is having a significant impact but in an unexpected way – the main impact is the wider distribution of where the exports are going,” he said.

“October is always a strong period for Russia but Indonesia is going strong, as are the Philippines and Singapore.”

So far this year, Russia has imported 38,436 tonnes of Australian beef, a giant leap from 14,884t for all of 2009.

The MLA figures suggest much of that increase has come from exports traditionally destined for the US, where the market, according to Mr McRae “is facing some hurdles”.

“The dollar is doing big damage to the US sector, because there’s quite a big spread between their domestic and imported meat prices,” he said.

“It will turn around and get back to normal levels, but the question of when that will happen is the main sticking point.”

At meat processor, Sanger Australia, which exports beef for Bindaree, Monbeef and RH Collinson, the Russian market overtook the US sector in October for the first time, senior trader, Stewart Hanna said.

“Japan continues to be our number one volume and revenue market but the US has dropped off significantly,” he said.

“The Russian market is strong and was our second biggest market for the first time ever.”

The MLA figures show more than 19,000t of beef have been shipped to the Middle East – up from 4374 tonnes in 2007 – and that exports to South-East Asia, including China, lifted by four per cent.

Mr Hanna said while the Russian and Indonesian markets would create a competitive replacement for the US sector, the Middle East and Chinese markets were the sectors representing the major opportunities for producers.

“The big issue with the US is that their domestic fresh, lean meat is US20 cents a pound cheaper and that gap is too much for exporters to contend with,” he said.

“It’s hard to come together and get into that market if the gap is like that.

“But Indonesia has continued to grow despite it being a bit difficult politically.

“The great hope that has sat there forever and a day is China and we as an exporting country are starting to realise that.”

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