Government Investigation Recommends Against Preliminary Safeguard Measures On Pork Imports...
Australia
Government Investigation Recommends Against Preliminary Safeguard Measures On Pork Imports
The Australian Productivity Commission today (Dec. 20) released its accelerated report regarding provisional safeguard measures for the Australian pork industry. The commission did not recommend provisional safeguard measures, but it will submit its full report by the end of March 2008. Further recommendations could be made then, and safeguard measures could be recommended for up to four years.
Although the commission reported that Australia’s pork industry is threatened by serious injury, it found no clear evidence that imports lie behind it:
“The principal cause of serious injury to the domestic industry would appear to be higher domestic feed prices. Moreover, pig producers worldwide are facing a similar cost-price squeeze caused by high feed costs (although probably not to the same extent as Australian producers), and higher global production costs can be expected to affect world pigmeat prices as production cuts come into effect.”
Feed typically accounts for 55 to 60 percent of an Australian pig producer’s total costs, with grain representing 80 to 85 percent of those costs. Grain prices reached record levels in October 2007, with feed wheat peaking at $A480 per metric ton, more than double the price in 2006. Due to grain import restrictions, Australian producers face prices higher than the rest of the world in times of drought. The impact of high wheat prices can also be seen in the Australian cattle feeding industry, with 23 percent fewer cattle on feed in Sept. 2007 compared to Sept. 2006, despite strong global demand. The strengthening Australian dollar was also cited as a reason for a leveling off of Australian pork exports.
Nearly all the 100 submissions the commission received argued in favor of safeguard measures except those from Australia’s state governments and 13 submissions from industry representatives and governments of exporting countries. The submission from Australia Pork Limited (APL) on behalf of the Australian pork producers, recommended provisional duties of 48 percent for middles and 62 percent for legs.
Denmark typically supplies boneless middles to Australia while Canada and the United States supply boneless hams and picnics. According to Australia’s import statistics, imports from Canada increased 24 percent (33,927 mt), imports from Denmark increased 38 percent (28,092 mt), and imports from the United States increased by 59 percent (26,891 mt). through October compared with Jan.-Oct. 2006. All pork imports enter Australia duty-free but strict sanitary-phytosanitary measures limit imports to frozen (or cooked) boneless product which must be processed on arrival under quarantine control. Pork imports from Canada were allowed entry in 1996 followed by Denmark in 1997, and the U.S. gained access to the Australian market in May 2004, and now has nearly a 30 percent market share. Australia is currently the eighth largest market for U.S. pork exports, valued at $71.3 million (including variety meat) through October 2007.
USMEF, the American Meat Institute, the National Pork Producers Council and the American Pork Export Trading Company will submit additional material to the Commission before the February 2008 deadline for submissions.
Australia
Government Investigation Recommends Against Preliminary Safeguard Measures On Pork Imports
The Australian Productivity Commission today (Dec. 20) released its accelerated report regarding provisional safeguard measures for the Australian pork industry. The commission did not recommend provisional safeguard measures, but it will submit its full report by the end of March 2008. Further recommendations could be made then, and safeguard measures could be recommended for up to four years.
Although the commission reported that Australia’s pork industry is threatened by serious injury, it found no clear evidence that imports lie behind it:
“The principal cause of serious injury to the domestic industry would appear to be higher domestic feed prices. Moreover, pig producers worldwide are facing a similar cost-price squeeze caused by high feed costs (although probably not to the same extent as Australian producers), and higher global production costs can be expected to affect world pigmeat prices as production cuts come into effect.”
Feed typically accounts for 55 to 60 percent of an Australian pig producer’s total costs, with grain representing 80 to 85 percent of those costs. Grain prices reached record levels in October 2007, with feed wheat peaking at $A480 per metric ton, more than double the price in 2006. Due to grain import restrictions, Australian producers face prices higher than the rest of the world in times of drought. The impact of high wheat prices can also be seen in the Australian cattle feeding industry, with 23 percent fewer cattle on feed in Sept. 2007 compared to Sept. 2006, despite strong global demand. The strengthening Australian dollar was also cited as a reason for a leveling off of Australian pork exports.
Nearly all the 100 submissions the commission received argued in favor of safeguard measures except those from Australia’s state governments and 13 submissions from industry representatives and governments of exporting countries. The submission from Australia Pork Limited (APL) on behalf of the Australian pork producers, recommended provisional duties of 48 percent for middles and 62 percent for legs.
Denmark typically supplies boneless middles to Australia while Canada and the United States supply boneless hams and picnics. According to Australia’s import statistics, imports from Canada increased 24 percent (33,927 mt), imports from Denmark increased 38 percent (28,092 mt), and imports from the United States increased by 59 percent (26,891 mt). through October compared with Jan.-Oct. 2006. All pork imports enter Australia duty-free but strict sanitary-phytosanitary measures limit imports to frozen (or cooked) boneless product which must be processed on arrival under quarantine control. Pork imports from Canada were allowed entry in 1996 followed by Denmark in 1997, and the U.S. gained access to the Australian market in May 2004, and now has nearly a 30 percent market share. Australia is currently the eighth largest market for U.S. pork exports, valued at $71.3 million (including variety meat) through October 2007.
USMEF, the American Meat Institute, the National Pork Producers Council and the American Pork Export Trading Company will submit additional material to the Commission before the February 2008 deadline for submissions.