Classy cattle fly into China

Elders has marked another milestone in cattle exports to China as the industry in Australia weighs up the impact of the latest controversy to rock the trade with Indonesia.

Elders air freighted 180 beef cattle to Zhengzhou yesterday as it works to create a safe, reliable supply chain into China.

Live export manager Cameron Hall said he expected sea freight exports to begin before the end of the year under strict quarantine protocols.

“That will be determined by the type and specifications of cattle that the importer or customer wants, where those cattle are available and what the cost of those cattle is going to be in the marketplace,” he said.

“There are a range of customers developing facilities in various locations at the moment.”

Elders is the only Australian exporter to have delivered slaughter cattle into China with the previous air freight consignment landing in Chongqing.

Mr Hall said it was too early to assess the ramifications of price manipulation allegations against 32 of Indonesia’s biggest importers and feed lot operators.

Indonesia’s competition watchdog has accused the companies, including Elders Indonesia, of cartel behaviour and hit them with $10 million in fines.

The fines are based on allegations supply was withheld to increase beef prices in the greater Jakarta area last year.

“I strongly suspect there will be an appeals process entered into by the importers and that will all take time to work through,” Mr Hall said.

“There were a range of situations in the marketplace at that time, including cattle on feed that were being sold, cattle on feed that weren’t ready for sale and questions relating to why there was a sudden and significant increase in beef prices. Those are issues best left and commented on by Indonesian authorities.”

The opening up of exports to China in significant volumes is expected to hit the thriving grey trade in Australian beef processed in Vietnam.

Live cattle shipments to Vietnam increased by 136 per cent to about 300,000 head in 2014-15 in a big boost for the industry.

“I think there is a viable and ongoing market in Vietnam,” Mr Hall said. “At what level that is we don’t know yet because some of the meat is sold from Vietnam into China.”

Elders chief executive Mark Allison said the latest air freight consignment from Melbourne to China was purchased by Chongqing Hondo Agriculture Group, which had a purpose built quarantine facility.

“As we’re seen with Elders Fine Foods business in China, Asia’s demand for premium Australian beef is increasing,” he said.

32The number of Indonesian cattle importers and feed lot operators hit with $10 million in fines.