In today’s Talking Points: Australian commodities bureau Abares lowers forecasts for milk powder, cheese and butter prices due to slowing demand from China; property developer Shanghai CRED to renew bid for Australia’s largest cattle company Kidman & Co post-election; Brazil and Uruguay overtake Australia as China’s biggest beef supplier; SunRice shifts gears to online sales and offshore suppliers as profits grow.
Abares downgrades dairy forecasts amid weaker than expected demand from China
Abares, the official Australian commodities bureau, downgraded its forecast for world skim milk powder price to $1850 a tonne in 2016/2017 down from its earlier forecast of $2340 in March. Forecasts for cheese and butter prices were also revised down. The bureau now forecasts that weaker than expected demand from China where stocks are still being drawn down will continue to exert downward pressure on prices. Australian output is expected to fall by 90m litres as lower prices drive producers to turn off less productive cows.
Read more at: Agrimoney
Chinese consortium indicates they will bid again for Kidman & Co following the election
Gui Guojie, chairman of property developer Shanghai CRED, indicated in an interview that his consortium would launch another bid on the Kidman empire following the election in July. Mr Gui indicated the consortium would monitor the new sales process and may consider making a bid for a smaller part of the properties. Shanghai CRED was one of the lead parties in the consortium whose offer of $370 million for Australia’s largest cattle company was rejected earlier this year by the federal government as contrary to national interests.
Read more at: AFR
Rabobank reports Brazil has overtaken Australia as China’s largest beef supplier
Brazil has overtaken Australia as China’s largest beef supplier in the first quarter of 2016 with Australia moving to third behind Uruguay according to Rabobank’s Beef Quarterly report. This change has been driven by moves by the Chinese government to diversify its sourcing options, together with rising Australian beef prices and increased availability of Brazilian beef. A number of Brazilian beef producers have secured permits to supply beef to China over the past 12 months in response to a drop in domestic consumption brought on by the political situation and economic slowdown at home.
Read more at: Global Meat News
SunRice enlist Asian growers to cope with local shortages and growing Asian sales.
SunRice is contracting offshore suppliers in Asia to help cope with a local water shortages and declining production. The move coincides with a 28% growth in its Asian sales last financial year and its recent opening of an office in Singapore to help further develop its exports to Asia. The company recently began offering its premium branded products to Chinese consumers online as it continues its move away from bulk commodity sales towards branded products which has been credited with improved profitability in its 2015 and 2016 financial results.
Read more at: The Land