Australia’s live export industry is closely watching an historic first shipment of cattle from Brazil to Vietnam.
- Australian exporters are keeping an eye on the first shipment of cattle from Brazil to Vietnam
- The shipment of 14,000 bulls is expected to arrive in late September
- The Vietnamese military is believed to be involved as it tries to shore up food security in the COVID-ravaged nation
One of the world’s biggest live export vessels, the MV Nada, has departed the Brazilian port of Vila do Conde and is en route to Vietnam with about 14,000 bulls onboard.
The ship is expected to arrive in southern Vietnam around September 23.
Michael Patching, an agricultural consultant based in Singapore, said the Vietnamese military was understood to be “heavily involved” in the import, in an attempt to shore up food security.
“Ho Chi Minh City has been heavily impacted recently with a severe outbreak of COVID-19 and the city is in severe lockdown,” he said.
“The army has been called in to lead the control of [lockdown] and the disease response.
Vietnam is Australia’s second-biggest customer for live cattle, with close to 300,000 head exported to the country in 2020.
A live export trade between Brazil and South-East Asia has long been discussed, especially as Australian cattle prices continued their rapid rise over the past few years.
Dr Patching said the economics of shipping cattle from Brazil to Vietnam would be “marginally profitable” at best, and could depend on how the cattle fared after such a long time on the water.
“If they are going through the army-channels, then the price side probably doesn’t matter, as they are already being subsidised.
“But if [future shipments] had to go through traditional supply chains, then they would be competitive at best.”
Dr Patching said the shipment was a test to see if a Brazil-Vietnam live cattle trade was feasible.
He said Indonesia and Thailand would also be closely observing the venture.
‘Probably double the cost’
Tom Kennedy, Elders live export manager for Queensland, said the cost of exporting cattle from Brazil to Vietnam would be approximately double the cost of a shipment from Townsville.
“Australian exporters are covering the costs of ESCAS [the Exporter Supply Chain Assurance System], about $1 million a year, no matter if they’re loading 30,000 or 130,000 head a year.
“Australia has been used to this competition of prices being cheaper from other countries … but we also deliver a pretty good product, which I think we should be focusing on.”
While Brazilian cattle may be cheaper than Australian cattle right now, Dr Patching said that in the long term, Australia would likely remain the preferred option for Vietnamese importers.
“It’s a shorter journey and less risk, so I think there’s no threat for that side of the trade.
“In the short term, there’s probably going to be some impact that [Brazilian cattle] are going to fill up a certain percentage of the supply chain that the northern cattle may have fed into.”
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