PH still a prime market for Aussie red meat

MANILA, Philippines – Australia, the largest exporter of red meat to the country, sees the Philippines as a prominent market in Southeast Asia despite an anticipated slowdown in global exports of Australian red meat this year as farmers rebuild their herd.

The thriving food service scene in the Philippines and the shift to a more protein-based, rather than a starch-based, diet as purchasing power rises, are expected to keep demand high, the Meat and Livestock Australia (MLA) said in a news briefing Thursday, February 12.

The MLA is an organization that provides marketing and research and development services for Australia’s cattle, sheep, and goat producers

The enforcement of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) in 2015 that eventually lowered to zero tariffs on beef and lamb exports is also contributing to sustained high demand for Australian red meat in the country.

Fast urbanization and expansion of the financially-empowered middle class is also fueling protein consumption, MLA noted.

High demand for red meat

More local restaurants are now offering a wide range of meat options, taking advantage of Australia’s capacity to supply red meat for every type of requirement – from restaurant grade cuts, to hamburger patties and corned beef for manufacturing companies, MLA country manager Peter Paul Perez said.

Although price remains a main consideration for Filipinos, consumers are also placing emphasis on quality. Perez noted that Australian beef is well known from its traceability traits.  Traceability is an instrument to assure food quality, particularly safety, in agri-food chains worldwide.

The industry also remains free from animal diseases.

Importers of Australian red meat have also strengthened their presence outside Luzon, increasing their number to over 25, some with offices in resort towns in Boracay to service the restaurant market there, said Perez.

Australia has cornered 47% of the Philippine market for red meat, 2013 data from the Bureau of Animal Industry showed.

Its main competitors are New Zealand which has a market share of 21%; the United States, 16%; and Brazil 13.9%.

Minor players like Canada and Japan provide the balance of the supply.

The Australian red meat industry is valued at AU$17 billion and holds 4% of the world’s cattle inventory.

Its largest export markets are Southeast Asia, China, Japan, US, and Korea.

Slowdown

In 2014, Australia exported to the Philippines 34,353 tons of beef (up by 27% year-on-year); 566 tons of lamb meat (up by 18%); and 62 tons of mutton (up by 73%).

Australia also exports live cattle for breeding. In 2014, 35,000 heads came to the Philippines, an 80% volume growth from the previous year. Most live cattle imports from Australia are brought to farms in Pampanga.

But starting 2015, Australian beef exports are expected to slow down by 15%, a supply correction, as the industry emerges from a 5-year drought that forced animal raisers to immediately slaughter their cattle, resulting in very high beef production levels in the past two years.

“So in 2015, this is expected to correct to a more acceptable level,” Perez said.

While most farmers are still rebuilding their herds, the domestic and export markers will be competing aggressively, and will face a test for price sensitive markets like the Philippines, Perez added.

Demand in Southeast Asia and China is expected to remain strong because of increased purchasing power and a wide range of meat products.

“Even if the volume of exports will be slower, the Philippines is expected to steal a corner of that volume because we now have a stronger buying power,” Perez said. – Rappler.com

Raw beef steak on wooden table image via Shutterstock