Local exporters watching as Brazil sends bulls to Vietnam in historic live export trade - ABC News

Australia's live export industry is closely watching an historic first shipment of cattle from Brazil to Vietnam. 

Key points:

• 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.

"So there could be a relationship to that and the food security of the army."

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.

The MV Nada left the northern Brazilian port of Vila do Conde with about 14,000 bulls on board.(

ABC News: Belinda Varischetti

)

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.

"In terms of performance, we'll have to see how they perform when they land and then whether they can be sold in the market," he said.

"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.

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'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.

"The biggest worry to Australian exporters is that Brazil does not have to comply with the standards we have to, as far as animal welfare and traceability," he said.

"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."

Experts believe Australian beef cattle will be preferred by Vietnamese importers in the long term.  (

ABC Rural: James Liveris

)

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.

"As Australian cattle become more competitive, then essentially we'll take over that market again," Dr Patching said.

"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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Local exporters watching as Brazil sends bulls to Vietnam in historic live export trade - ABC News
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