After a tumultuous 2008, the Australian dollar (A$) edged higher during the first few trading days of 2009, reaching its highest level since early October, trading above 71.2US¢. Compared to the same period last year, the A$ remains 18 percent lower against the US$ and 30 percent down against the Japanese yen.
The plunge in the value of the A$ during the second half of 2008 assisted demand for Australian red meat exports in some markets, notably the United States and Japan. However, combined with the credit crisis and deteriorating economic outlook, it also disrupted trade, causing some importers to cancel contracts or seek renegotiated prices. Many importers and end users have also moved to hand-to-mouth buying until dear stocks are cleared, credit is obtained and the trading situation becomes clearer. This lower A$ is anticipated to assist demand for Australian beef and lamb throughout 2009, with cattle and lamb prices forecast to average higher.
Reprinted in part from Meat and Livestock Australia