Mr MITCHELL - 1999-06-02
I understand that the minister has recently returned from a trip with cattle exporters to the Philippines and Vietnam. Can the minister tell the Assembly what the prospects for expansion may be in that particular trade in those areas?
ANSWER
Mr Speaker, indeed I have just returned from both the Philippines and Vietnam, and before getting on to the answer, I’ll just put the trade back in its historic context ...
Mr Bailey: What did you agree to do this time?
Mr SPEAKER: Order!
Mr PALMER: ... and where we’re at today.
Mr Speaker, we did institute amendments to the standing orders that allows you to deal with these people.
Mr SPEAKER: Yes, and I’ll make a judgment on that.
Mr PALMER: In 1997, into Indonesia, we put out 244 000 head, last year 19 000 head, year to date 19 600 head.
The Philippines in 1997, we put out 167 000 head, last year 133 000 head, and this year 63 000 head. West Malaysia in 1997, 17 000 head, last year 9600 head, and the year to date 8600 head. So you can see the trade is gradually returning.
What we did in the Philippines is visit a couple of the feed lotters and meat processors and identify a couple of the problems they have in terms of improving the access of their meat into the higher quality market, either the hotel or hospitality trade. We’ve undertaken to provide some training courses there because what’s happening with at least 2 of these locations is they take Territory cattle, they feed the cattle, they are good cattle when they kill them, they slaughter them, and unfortunately, post-slaughter, their handling of the meat is not conducive to the production of high quality meats. In both instances they hang the beast in unchilled circumstances for 10 to 12 hours and then cart it to a boning room. It is simply a matter of hanging the beast in a chiller post slaughter, and the use of the electrical stimulator can help them address that market.
Also, we undertook to put in a pen of cryptorchids, which are bulls that have had their testicles pushed up above their scrotum sack then constricted with a rubber band which drops off, so these are in fact bulls unable to breed, and their growth rates are extraordinary. In fact, in trials we’ve found that the cryptorchids have growth rates better than those cattle that have been using hormonal growth promoters.
I wouldn’t like to be a cryptorchid myself. I have some normal bodily functions and it would bring some grievous pain.
In Vietnam we visited with the ministry of agriculture, we visited with the minister for fisheries and we also visited with the people’s committee of Khan Hoa province and the Nissan trading organisation. The trade with Vietnam will develop and it will require investment both by Australian interests and the Vietnamese interests. It does require some work in the market place prior to more cattle going there. However, the Australian cattlemen and investors I had with me did show considerable interest in Vietnam and I’m confident that market will open up.
In relation to Indonesia, I chaired a meeting in Canberra of a working party looking at the financing arrangements to the livestock export trade. What’s happened in Indonesia especially with the sharp devaluation of the rupiah, those importers who were previously able to provide sureties against LC’s raised either over 180 days or 120 days …
Mr Coulter interjecting.
Mr PALMER: With raised levels of credit. To explain simply what happens - an importer will go to a bank, seek to raise a level of credit for a load of cattle, perhaps say for $1m over 180 days. The bank will seek some sureties from him to stand against that letter of credit. That letter of credit is then provided and security guaranteed to an Australian exporter who then provides a capital. The letter of credit is repaid to the bank 180 days later. With the sharp devaluation of the Indonesia rupiah, many of the importers have been unable to provide those sureties against the letter of credit where previously they had been able to. The asset base has remained the same except its conversion to US or Australian dollars is not sufficient to cover the value of the letter of credit.
I had a meeting or a seminar involving EFIC, the Export Financial Insurance Corporation, myself chairing it, a standard charter bank, ANZ Bank, the Life Corp and a number of representatives of live stock export trade. What we did was look at ways of addressing the problems we can see. Life Corp has now undertaken to employ a consultant to work in cooperation with the banks and EFIC so we can look at alternative methods of financing those LC’s. If we can do that there is no reason that the Indonesian trade can’t return to the levels of 1997.
The demand for beef remains in Indonesia, the market price either on the wet markets or in the supermarkets remain such that the trade is sustainable. It’s just a matter of getting those importers and those processes that were previously in the market, who have an exemplatory credit record and who have never, ever taken a knock on an LC, and being able to jack them back in to the market.
So, all in all, the out look for the live cattle trade from the Northern Territory looks pretty good. There are some areas that we need to address, there are some areas of cooperation we need to enter into with the Philippines, Vietnam and Indonesia in relation to our post market support for the trade. However, as I said, there is no reason that in time the trade out of Darwin and out of Australia in general can’t return to those 1997 levels.
I think that aside from Vietnam, Indonesia and Philippines, there are markets now available in Israel. We’ve done some work with China in the last week or so where there are emerging markets in China and emerging possibilities in China. The bombing of the Chinese Embassy in Belgrade did wonders for our trade relationships in China and that’s being …
Mr Bailey interjecting.
Mr PALMER: Yes, that’s just a fact of international politics and the trade with Egypt and Libya is still in place. The opportunities for the live trade from the Northern Territory are good and the trade will be sustained.
ANSWER
Mr Speaker, indeed I have just returned from both the Philippines and Vietnam, and before getting on to the answer, I’ll just put the trade back in its historic context ...
Mr Bailey: What did you agree to do this time?
Mr SPEAKER: Order!
Mr PALMER: ... and where we’re at today.
Mr Speaker, we did institute amendments to the standing orders that allows you to deal with these people.
Mr SPEAKER: Yes, and I’ll make a judgment on that.
Mr PALMER: In 1997, into Indonesia, we put out 244 000 head, last year 19 000 head, year to date 19 600 head.
The Philippines in 1997, we put out 167 000 head, last year 133 000 head, and this year 63 000 head. West Malaysia in 1997, 17 000 head, last year 9600 head, and the year to date 8600 head. So you can see the trade is gradually returning.
What we did in the Philippines is visit a couple of the feed lotters and meat processors and identify a couple of the problems they have in terms of improving the access of their meat into the higher quality market, either the hotel or hospitality trade. We’ve undertaken to provide some training courses there because what’s happening with at least 2 of these locations is they take Territory cattle, they feed the cattle, they are good cattle when they kill them, they slaughter them, and unfortunately, post-slaughter, their handling of the meat is not conducive to the production of high quality meats. In both instances they hang the beast in unchilled circumstances for 10 to 12 hours and then cart it to a boning room. It is simply a matter of hanging the beast in a chiller post slaughter, and the use of the electrical stimulator can help them address that market.
Also, we undertook to put in a pen of cryptorchids, which are bulls that have had their testicles pushed up above their scrotum sack then constricted with a rubber band which drops off, so these are in fact bulls unable to breed, and their growth rates are extraordinary. In fact, in trials we’ve found that the cryptorchids have growth rates better than those cattle that have been using hormonal growth promoters.
I wouldn’t like to be a cryptorchid myself. I have some normal bodily functions and it would bring some grievous pain.
In Vietnam we visited with the ministry of agriculture, we visited with the minister for fisheries and we also visited with the people’s committee of Khan Hoa province and the Nissan trading organisation. The trade with Vietnam will develop and it will require investment both by Australian interests and the Vietnamese interests. It does require some work in the market place prior to more cattle going there. However, the Australian cattlemen and investors I had with me did show considerable interest in Vietnam and I’m confident that market will open up.
In relation to Indonesia, I chaired a meeting in Canberra of a working party looking at the financing arrangements to the livestock export trade. What’s happened in Indonesia especially with the sharp devaluation of the rupiah, those importers who were previously able to provide sureties against LC’s raised either over 180 days or 120 days …
Mr Coulter interjecting.
Mr PALMER: With raised levels of credit. To explain simply what happens - an importer will go to a bank, seek to raise a level of credit for a load of cattle, perhaps say for $1m over 180 days. The bank will seek some sureties from him to stand against that letter of credit. That letter of credit is then provided and security guaranteed to an Australian exporter who then provides a capital. The letter of credit is repaid to the bank 180 days later. With the sharp devaluation of the Indonesia rupiah, many of the importers have been unable to provide those sureties against the letter of credit where previously they had been able to. The asset base has remained the same except its conversion to US or Australian dollars is not sufficient to cover the value of the letter of credit.
I had a meeting or a seminar involving EFIC, the Export Financial Insurance Corporation, myself chairing it, a standard charter bank, ANZ Bank, the Life Corp and a number of representatives of live stock export trade. What we did was look at ways of addressing the problems we can see. Life Corp has now undertaken to employ a consultant to work in cooperation with the banks and EFIC so we can look at alternative methods of financing those LC’s. If we can do that there is no reason that the Indonesian trade can’t return to the levels of 1997.
The demand for beef remains in Indonesia, the market price either on the wet markets or in the supermarkets remain such that the trade is sustainable. It’s just a matter of getting those importers and those processes that were previously in the market, who have an exemplatory credit record and who have never, ever taken a knock on an LC, and being able to jack them back in to the market.
So, all in all, the out look for the live cattle trade from the Northern Territory looks pretty good. There are some areas that we need to address, there are some areas of cooperation we need to enter into with the Philippines, Vietnam and Indonesia in relation to our post market support for the trade. However, as I said, there is no reason that in time the trade out of Darwin and out of Australia in general can’t return to those 1997 levels.
I think that aside from Vietnam, Indonesia and Philippines, there are markets now available in Israel. We’ve done some work with China in the last week or so where there are emerging markets in China and emerging possibilities in China. The bombing of the Chinese Embassy in Belgrade did wonders for our trade relationships in China and that’s being …
Mr Bailey interjecting.
Mr PALMER: Yes, that’s just a fact of international politics and the trade with Egypt and Libya is still in place. The opportunities for the live trade from the Northern Territory are good and the trade will be sustained.
Last updated: 09 Aug 2016