Growth opportunities for Australian beef exports into South-East Asian markets – Rabobank

Australia has the opportunity to cement itself as one of the key beef suppliers into South-East Asian markets – as the appetite for beef continues to grow among the region’s consumers, according to agribusiness specialist Rabobank.

In its just-released report Growth opportunities in South-East Asia for Australian beef, the bank said there is an expectation the South-East Asian region will continue to experience growth in beef consumption – in the order of two to three per cent per annum over the next five years – and imports will be needed to meet the majority of this growth.

Report author, RaboResearch senior animal proteins analyst Angus Gidley-Baird said a large population base and increasing wealth in key South-East Asian markets – including Indonesia, Malaysia, Philippines, Thailand and Vietnam – present an opportunity for Australian beef to position itself as a high quality but value focussed supplier for consumers through foodservice and grocery channels.

Mr Gidley-Baird said geographic proximity, trade agreements and product offering gives Australia a strong advantage in supplying countries in the region. “Leveraging this advantage and further developing relationships and business partnerships as well as working to meet their product needs can help Australia capture future growth opportunities,” he said.

“And realising this opportunity will also support the ongoing growth of the Australian beef industry in an increasingly competitive global marketplace.”

South-East Asia represents the fifth largest export market for Australian beef, Mr Gidley-Baird said, taking approximately 10 per cent of the country’s exported beef volume and value in 2023.

 

South-East Asian consumers

“Beef is one of the lesser-consumed proteins across South-East Asia,” Mr Gidley-Baird said.

In all countries, except Indonesia, beef sits behind pork, poultry and seafood on a per capita consumption basis and generally represents no more than six per cent of the total (including seafood) protein consumption.

The Rabobank report said in volume, Vietnam is projected to see the largest increase in consumption (up 152,000 tonnes) with Indonesia the second largest (up 97,000 tonnes) over the next five years.

“Beef retail sales volumes and values have been increasing at a healthy rate across the region,” the report said.

Mr Gidley-Baird said in many of the South-East Asian countries, formal retail sales channels were less developed and wet markets still played a very important role in food distribution, with wet markets believed to make up a large proportion of bovine product sales.

He said retail sales data reflected sales through formal channels (as reported by established retail outlets), rather than sales through wet markets.

“While we believe wet markets will continue to have a role in these economies, the growth in retail sales illustrates an increasing presence of beef in more formal food sales channels, providing opportunities for importers of bovine products,” he said.

Mr Gidley-Baird said in the past five years, “beef retail sales volumes (in South-East Asia) have increased by five per cent per year, and sales values have risen by 12 per cent per year”.

 

Suppliers

Rabobank expects domestic beef production growth in South-East Asia will be limited, largely due to land resource and capital constraints. So, to meet the expected increase in consumption there will need to be an increasing supply of imports.

“The bulk of bovine product imported into the South-East Asian region is derived from three main suppliers,” Mr Gidley-Baird said. “In 2022, India and Australia made up the majority (at 53 per cent and 18 per cent respectively) and recently Brazil has increased its volumes (to 13 per cent). The US is the next largest supplier at a much smaller six per cent of the market.”

Mr Gidley-Baird said South-East Asian countries are generally importers of low-value bovine products (the term bovine includes beef and buffalo products, as many South-East Asia countries imports buffalo products from India). “Apart from Thailand – which is a relatively small consumer of bovine products, with one of the higher wealth levels – the other South-East Asian countries are similar with a low per unit import value of around USD 3.50/kg. This compares to an average per unit export value out of Australia of about USD 6.20/kg.”

The report said Australia’s current exported cuts to South-East Asian markets and the origin of our exports reflected this lower price point market.

Brisket and “manufacturing cuts” are the predominant exported cuts from Australia to these markets, Mr Gidley-Baird said, with some also taking larger volumes of knuckle (Indonesia, Vietnam), shin/shank (Vietnam) and chuck roll (Thailand).

“Queensland, with their higher bos indicus-content beef and Victoria with a higher cow kill are the major exporters to the South-East Asia region, comprising 51 per cent and 31 per cent respectively of Australia’s total exports in the 2023/24 year.”

 

Growth opportunities

Mr Gidley-Baird said beef consumption was expected to gradually increase in the South-East Asian region, presenting opportunities for the Australian beef industry.

“The OECD FAO (Organisation for Economic Co-operation and Development and the Food and Agriculture Organization of the United Nations) project that beef consumption in the South-East Asian region will increase by 15 per cent (344,000 tonnes) over the next five years,” he said.

“Like other developing beef-consuming nations and following similar paths to more developed countries, we expect an increase in per capita (that is per person) consumption will drive the majority of this consumption growth.”

Increases in wealth, improvements in cold chains, urbanisation and westernisation of diets will all shape the consumption volumes of the future including what we expect to be an increase in South-East Asian beef retail and foodservice sales, Mr Gidley-Baird said.

“The growth in retail and foodservice markets provide a good opportunity to leverage the characteristics of Australia’s beef industry and increase exports to the region.”

 

RaboResearch Disclaimer: Please refer to our Australian RaboResearch disclaimer here.

 

Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 125 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 37 countries, servicing the needs of approximately 8.4 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 90 branches throughout Australia and New Zealand.