Trade access crucial ahead of challenging year for Australia
In his first global markets update for 2018, MLA’s general manager of international markets Michael Finucan said trade deals at the start of the year were looking positive.
He said: “The year has begun with some significant news for Australia’s red meat and livestock industry around trade and market access, with the announcement that an agreement has been reached by 11 parties to sign a revised Trans-Pacific Partnership (TPP) deal in Chile in March. The deal, to be known as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), follows the Australian Government concluding a Free Trade Agreement (FTA) with Peru.
“These market access gains will continue to benefit our industry with ongoing reductions in key tariff lines occurring in key markets. Importantly, it will complement the gains derived from the other free trade agreements Australia has concluded to date.”
Finucan said the tariff arrangement between Australia and Mexico has been extended until the end of 2019.
“In other good news for our industry, the Mexican Government has extended until 31 Dec 2019 the temporary exempt tariff-quota measure applicable to Australian beef imports. This will give confidence to exporters looking to start business to Mexico that they can build their trade relationships and business.”
He said the competitive domestic scene would benefit from this continued market access.
“With the ongoing competitive pressures in key markets these ongoing market access gains are key to the success and future prosperity of the Australian red meat industry. MLA’s cattle and sheep industry projections released recently indicated some of the pressures that are being faced. Cattle supplies are anticipated to remain tight in 2018 with only a small rise forecast in adult slaughter to 7.4 million head, as the herd rebuild continues.”
He also updated the industry on meat exports that weren’t as positive.
“It is shaping up to be a challenging year ahead for Australian beef exports, with expected increases in production and exports from many of our major competitors, including the US and Brazil,” said Finucan. “Australia's boxed beef exports are still predicted to edge above one million tonnes shipped weight (swt) following the forecasted growth in production, which will be larger than any year prior to 2013, as many strong international demand fundamentals remain in place.
“For sheep meat it is expected that both lamb and mutton exports will continue to follow domestic production shifts,” he added. “Exports are likely to plateau in 2018 before building up again in coming years. The increase in both sheep meat production and prices in 2017 highlights the strength of the market. Current market signals are showing no significant change to international demand in 2018 and with the anticipated softer overall sheep meat production, this year should see continued support for prices.”
