Australia-Beef exports get a slow start in 2009.

AUSTRALIA-Australian beef exports will pick up after a soft start

to eventually reach a record 990,000 boneless metric tons in 2009, up 3.4% on

year, according to annual projections issued late Thursday by marketing concern

Meat & Livestock Australia Ltd.

The rise is primarily due to an expected decline in the value of the

Australian dollar, which is forecast to trade in a range of US$0.65-US$0.75

this year, down from a tumultuous 2008, when it averaged US$0.853, MLA said.

The weaker currency is expected to more than offset the impact of the global

economic slowdown on consumer demand, which will be weaker earlier in the year

as disruptions caused by credit problems work through the system, it said in

its annual projections document.

"The high beef stocks in South Korea and Russia are likely to be depleted

over the first quarter of the year, forging the basis for an expected lift in

buying from Japan, South Korea and Russia by the second quarter," it said,

after soft demand earlier in the year.

Reduced beef supplies from competitor the U.S. and continued constrained

exports from Brazil and elsewhere in South America will assist export demand

prospects for Australian beef in the short term, it said.

Australia is the second largest beef exporter in the world after Brazil, with

annual trade valued at more than A$4 billion.

Of major markets in 2009, Australian beef exports will rise by 3% on year to

Japan to 375,000 tons and rise by 38% on year to the U.S. to 325,000 tons, MLA

forecast.

But Australian beef exports to South Korea will slump 17% on year to 105,000

tons, reflecting weaker consumer demand and increased competition in the market

from the U.S., which is expected to be retail price competitive after a build

in stock levels, MLA forecast.

Australian beef exports to Russia soared many times to a total 73,000 tons in

2008 but collapsed late in the year.

Russian import demand is a major source of uncertainty for 2009, with

Australian exports forecast at 30,000 tons, MLA said.

Russia likely will be a significant market for Australian beef in 2009 after

current problems recede. Slower growth in Russian consumer demand for beef this

year, ongoing payment issues for beef and damaged trade relations are expected

to impact the trade, "with many Australian exporters likely to be reluctant to

ship to this market," MLA said.

Reduced volumes shipped to Russia will increase availability of meat to other

countries, such as the U.S., it said.

Australian exports to Southeast Asia likely will continue to expand in 2009,

with exports to rise 13% on year to 71,000 tons after surging 55% on year in

2008, it said.

Indonesia will remain the biggest market in Southeast Asia, with trade

volumes rising 12% on year in 2009 to 37,000 tons. Southeast Asia also includes

Malaysia, Singapore and the Philippines, it said.

Taiwan remains a consistent customer, with Australian exports there in 2009

to rise 11% on year to 30,000 tons.

After the short-term impact of the credit crisis and economic slowdown

passes, the beef trade should again find global demand growth driven by

population increases and income growth, outstripping the expansion in supplies,

leading to rising beef prices and imports, it said.

The only significant market access changes anticipated in the next five years

for Australia are an easing in import protocols for U.S. beef into South Korea

and possible signings of free trade agreements between Australia and Japan,

Australia and South Korea and between the U.S.. and South Korea.