Territory Stories

Budget Paper No5 Northern Territory Economy 1998/99



Budget Paper No5 Northern Territory Economy 1998/99

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Tabled Paper 382


Tabled papers for 8th Assembly 1997 - 2001; Tabled papers; ParliamentNT




Tabled by Michael Reed


Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.




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However, Territory live cattle exported through Darwin Port seem to be faring better than interstate cattle, with 16.4% growth comparing the first three months of 1998 with the same period in 1997. This is possibly due to Territory cattle being offered at more competitive prices than those from other states. The general decline in live cattle exports has been worsened by a delay in the South East Asian monsoon season (particularly in Indonesia) which has resulted in a higher than normal turnoff of domestic cattle. The full impact of the crisis on the live cattle trade will be more evident when the new northern cattle season starts in April/May 1998. PASTORAL OUTLOOK Due to the financial crisis in South East Asia, the short term outlook for the pastoral industry is highly uncertain. The live export trade into South East Asia has been the driving force behind growth in the pastoral industry for the past few years. Demand for imported cattle in South East Asia is expected to decline in the region due to rising consumer prices brought about by currency devaluations and an expected decline in incomes in the region. Indonesia is the largest importer of live cattle from Australia (accounting for some 53% of the Territory live cattle export trade in 1997) and has experienced significant currency deprecations. The deterioration in live cattle trade with Indonesia is therefore expected to be much greater than with other South East Asian countries, such as Malaysia and the Philippines. Other factors that may affect live cattle exports are: sharp increases in interest rates in South East Asian countries over 1997 have adversely affected the long term investment plans of some private feedlots importing cattle; tight fiscal policies planned by some South East Asian countries may include cuts to government assistance to their live stock sectors; and if the El Nio drought weather pattern continues well into 1998 in the region, it may adversely affect the availability of agricultural crops and crop by-products (such as from rice, maize, sugarcane & pineapples) which are used in feeding imported live cattle. While it is difficult to predict when the South East Asian financial crisis will be over, live cattle exports to the region are forecast to fall sharply in 1998, and remain low over 1998-99. Prices are expected to be particularly volatile due to changing climatic conditions and currency fluctuations. This will in turn affect industries associated with the pastoral industry, including shipping, cattle road transport, feed suppliers, stock agents, veterinary services, and other related industries. In the short term, demand for Territory cattle may be able to be supplemented by the interstate feedlot market and the abattoir market. Countries outside South East Asia which have generally experienced currency appreciations against the Australian dollar may now view Australian live cattle as a cheaper alternative to other sources. A market with potential for longer term export growth is China. A new Australia -China quarantine protocol is being negotiated. This will allow the live export of slaughter and store cattle to China from Australia. The cattle will initially be sourced from below the blue tongue disease vector line in northern Australia which currently excludes the Territory and Queensland. The Chinese preference is for the Brahman breed of cattle, and the market potential is 56 Northern Territory Economy

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