In this file:
· China raises the cost of Australian beef as ChAFTA safeguard is triggered
· Cattle prices have surged throughout 2020 but analysts say its peak is nearing
China raises the cost of Australian beef as ChAFTA safeguard is triggered
o Tariffs on Australian beef into China will jump from less than 5 per cent to 12 per cent for six months
o China's tariffs are also expected to increase on whole milk powder
o The tariffs will drop back to preferential rates under ChAFTA on January 1
Kath Sullivan, ABC Rural Australia
Jul 1, 2020
China has increased tariffs on imports of Australian beef and looks set to increase tariffs on whole milk powder later this year.
Australian meat analyst Simon Quilty said, from this week, the duty on beef would jump from 4.8 per cent to 12 per cent for the remainder of 2020.
Under the China Australia Free Trade Agreement (ChAFTA) preferential tariffs are withdrawn once a Special Agricultural Safeguard (SSG) is triggered.
This year the safeguard was set to 179,687 tonnes of beef, a volume that was met on Tuesday.
Despite Australia triggering the safeguard for the past two years, a spokeswoman from the Department of Agriculture said that June was the earliest that preferential tariffs have been dropped since CHAFTA was established in 2015.
"The unprecedented growth of Australian beef meat exports to China in the year to date means that the volume has reached the threshold already this year," the spokeswoman said.
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Cattle prices have surged throughout 2020 but analysts say its peak is nearing
o Australian cattle prices have been surging throughout 2020
o Analysts say prices will start to dip once beef producers stop restocking
o The gloomy economic forecast suggests overseas consumers will favour cheaper types of meat
Clint Jasper, ABC Rural Australia
Jul 1, 2020
Despite nationwide lockdowns and a slide into recession, Australia's east coast cattle market has been surging throughout this year.
Beef producers have been clamouring to restock their previously drought-parched properties after solid rainfall, driving saleyard prices to record highs.
And, after an epic sell down of Australia's cattle herd during the drought, farmers, feedlots and abattoirs are all competing for the smallest cattle herd in 30 years.
Australia is now home to some of the world's most expensive cattle.
Pregnant cows, worth $1,200 a head in northern New South Wales three years ago now have a $2,000 price tag, while heifers have gone from $350 a head to $800 in three years.
This has all occurred as the global economy slides into a pandemic-induced recession, and analysts are predicting the booming cattle market won't be able to stay detached from the global downturn for long.
Prices on the main industry indicator, Eastern Young Cattle Indicator (ECYI) the will start heading down in either October or November, according to independent livestock analyst Simon Quilty.
"I see we're getting to around about 850-860 cents on the ECYI.
"By late June it was at 774 cents, so I think we're in for an interesting time, there's going to be a lot of factors going in our favour getting into the 850-860 level, but we've got some headwind without doubts."
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