21/07/2015 - 06:11

Wellard cautious on China boost

21/07/2015 - 06:11

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Australia’s largest live cattle exporter, Wellard Group, has welcomed a new deal that will open up the China market but has cautioned about the likely boost, especially for cattle producers in northern Australia.

Wellard cautious on China boost

Australia’s largest live cattle exporter, Wellard Group, has welcomed a new deal that will open up the China market but has cautioned about the likely boost, especially for cattle producers in northern Australia.

Agriculture Minister Barnaby Joyce announced yesterday a landmark protocol that will allow feeder and slaughter cattle to be exported to China.

Mr Joyce speculated the China market could more than double the value of Australia’s live cattle exports, valued at $1.2 billion last year by Meat & Livestock Australia.

The potential for growth in China may help to offset Indonesia’s decision last week to cut its intake.

Indonesia is by far Australia’s biggest live cattle market, taking 730,257 head in 2014.

The new agreement builds on a protocol that allows breeding cattle to be exported to China.

In the 2014 calendar year, Australia exported 118,000 cattle to China out of a total live cattle trade of 1.3 million head.

Fremantle-based Wellard is one exporter already active in China. It exported a record 389,327 cattle in 2014-15, with China being one of its secondary markets.

Wellard CEO Mauro Balzarini acknowledged the potential for growth in China, saying that “in time this will be a very important market for Australia’s cattle producers”.

Wellard’s longstanding commercial relationships and track record in compliance with China’s stringent health protocols will be important as we seek to work through the commercial and regulatory aspects of the new protocol to provide a new marketing opportunity for Australian cattle producers,” Mr Balzarini said.

“We want to be an active player in the Chinese beef market, not just as a cattle supplier, but in beef processing and wholesaling with a strong partner.”

Wellard chief operating officer Scot Braithwaite said the company possessed the shipping capacity to supply the Chinese markets and could increase that capacity if required, however it would take some time to develop the necessary infrastructure in China’s various provinces to handle significant numbers of cattle.

Wellard also noted the 60-day quarantine requirement for slaughter cattle from Australia’s north (inside the blue tongue virus-infected zone) to be exported to China’s ‘vector active zone’.

That contrasts with the seven-day quarantine requirement in other zones.

“It is not an easy protocol to meet as its various quarantine requirements will place considerable demands on producers and exporters,” Mr Braithwaite said.

Wellard’s preliminary view is that the first commercial trade to develop will be feeder cattle from the southern BTV-free zones as the quarantine requirements are not as onerous and there is greater flexibility with maximum processing timeframes,” he said.

“This will complement other markets like Russia and Turkey which have proven to be intermittent buyers of southern cattle.”

Australian Livestock Exporters Council chief executive Alison Penfold said Australia will be the first country to export feeder and slaughter cattle to China.

Ms Penfold acknowledged the pre-conditions yet to be met, including commercial agreements, compliant supply chains and import permits to be issued by Chinese authorities.

“This could take some time so it is difficult to say just when we will see the first ships depart but obviously we hope in the next couple of months,” she said.

Ms Penfold said that expectations about supplying the market need to be moderated by the health, quarantine and cattle specification conditions contained in the protocol and required by regulations governing the live trade.

“While good access is provided, it comes with conditions on exporters in preparing consignments including that cattle must be HGP free, be resident on the farm of origin for three months and must be pregnancy tested empty,” she said.

“Cattle will need to be prepared in registered quarantine premises and in line with the welfare requirements of the Australian Standards for the Export of Livestock.

“There are also specific requirements for the export of feeder and slaughter cattle from Australia’s bluetongue virus zone to China’s bluetongue virus areas and limitations on ports of entry. That said there is access for northern and southern cattle.”

 

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