A second large shipment of Brazilian bulls is expected to set sail for Vietnam in December after the successful delivery of the historic first shipment aboard the MV Nada last month.
The first shipment, which included nearly 14,000 black and gray-haired Nellore bulls weighing an average of 550 kg, was unloaded at the port of Thi Vai near Ho Chi Minh City in southern Vietnam on September 23-24.
The trade-opening expedition, which establishes a second source of live cattle supply for Vietnam in addition to cattle from Australia, has gone “very well,” according to the parties concerned.
MV Nada owner Danny Fakhre told Beef Central this week that the 30-day trip produced a fatality rate of all 14,000 head of 30 head, or 0.25 percent, lower than expected. might be expected on a farm or feedlot in South America. or Australia, he said.
The weight loss on the 500 kg bulls throughout the journey was on average less than 5 percent, also lower than usual rates.
“The performance on board has been very good,” said Mr. Fakhre.
“After unloading, the feedback we get is that the importer is very happy with the animals and the authorities are very happy with the way the cattle traveled and what happened after the unloading. “
Mr. Fakhre is the shipowner and not the exporter and could not confirm the price in question.
However, other sources who are said to be aware of the deal told Beef Central that the price was CIF $ 3.20. This would be around 25 US cents less than the best available CIF price for Australian steers or slaughter bulls at current market prices.
When additional local costs and charges are factored in, the actual landed price arriving at the feedlot may have been closer to US $ 3.50, according to some sources. But that would be even cheaper than recent sales of cattle from Australia to Vietnam according to quoted estimates of around CAF $ 3.70 to 3.80.
Cattle from Brazil are also subject to a 5 percent import tax on arrival which is waived on Australian cattle due to regional trade agreements, but even with this drawback and higher transportation costs, Brazilian cattle can still be landed in Vietnam at a lower price than Australian cattle which are at historically high price levels.
The transaction was facilitated by a well-known Vietnamese importer with several feedlots and slaughterhouses in South Vietnam and with many years of experience importing Australian cattle, working in partnership with a military company based in Ho Chi Minh City.
Mr Fakhre told Beef Central that the importer had received a permit from the Vietnamese government to import 60,000 cattle from Brazil, which equates to four shipments aboard the Nada, one of the world’s largest cattle carriers.
He said it is expected that further import permits will be issued to other importers when authorities are satisfied that the initial shipments have been successful.
Second expedition in December
Mr Fakhre said the original idea was for four trips to occur consecutively from Brazil to Vietnam.
However, he said the Vietnamese importer had requested that the second shipment be delayed until December.
“Due to the Covid situation right now in Vietnam, they have some restrictions, so they asked if we could do a separate trip between the two,” he said.
“So they won’t have a back-to-back shipment, but we think they might take a second shipment in December.”
Other sources told Beef Central that recent BSE detections in Brazil prompted Vietnamese authorities to extend the quarantine period to 45 days before Brazil’s first cattle can be processed.
Two cases of atypical BSE were formally confirmed in Brazil about a week after the departure of the first shipment en route to Vietnam.
The trade consequences of a 45 day delay would include postponing first shipment commercial returns for importing parties and now being delayed by approximately six weeks.
Mr Fakhre said he did not believe BSE detections played a role in the delay of the second shipment, as the atypical cases of BSE were detected in cattle in Brazil some 2,000 km from there. State of Para, where the cattle for the expedition came from.
“I don’t think the Vietnamese were too worried, they’ve already had these cases, which are atypical.
“Importers are monitoring the situation.
“What they did was rather than having two unloading ports, which was the original plan, they decided to unload all the livestock in one port to have them all in one area for better. to watch.
“The main reason (for the delay) was the lockdown in Vietnam, all restaurants were closed, beef consumption was down, so it was more of a business decision.”
The MV Nada left Vietnam and is currently heading for the Suez Canal.
Mr Fakhre said the Nada could make a trip carrying South American beef cattle to the Middle East or South American dairy cattle to China before returning to Brazil to load the second shipment of bulls for Vietnam.
Brazil’s first shipment to Vietnam was closely watched by the Australian Live Cattle Trade, which was so far the only approved supplier of live cattle to Vietnam.
Fakhre said he did not believe imports from Brazil would replace imports from Australia, saying the two countries offered unique advantages to Vietnamese importers.
Brazil provided an important second source of supply, was able to supply large volumes of bulls that Vietnamese buyers preferred, and was currently able to land cattle at a lower price in Vietnam than Australia.
Cattle from Brazil were also not subject to the ESCAS rules that importers of Australian cattle must comply with. The ESCAS rules reduced flexibility in where and how Vietnamese importers could sell livestock.
On the other hand, Australian cattle had the highest animal health standards in the world and closer geographic proximity to Vietnam.
“Australian cattle will always be desirable for Vietnamese importers,” he said.
“The Vietnamese want a second source of supply and not just rely on Australia, but I don’t see this as a replacement.”