market snapshot SOUTH EAST ASIA Australian trade overview Export values to the region during 2015 totalled A$379 million, down 2% from 2014.

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1 export value A$379 million in 215 export volume 57,136 tonnes swt in 215 population 4 million by 22 (inc. Indonesia) grocery market US$55 billion by 217 market snapshot SOUTH EAST ASIA BEEF Australian trade overview In this report, South East Asia (or SEA) includes the following countries Malaysia, Thailand, Singapore, the Philippines, and Vietnam, as well as Brunei, Cambodia, Laos and Myanmar. MLA is publishing a separate snapshot report for Indonesia. SEA is a fast growing destination for Australian red meat, with their meat consumption steadily rising in line with the region s economic development and population increase. In 215, Australia sent 57,136 tonnes swt of beef to the region, down 14% from the previous year, largely due to a decline of exports to the Philippines. Australian beef exports Export values to the region during 215 totalled A$379 million, down 2% from 214. Philippines Singapore Roughly 73% of Australian beef shipments to the region have been frozen grassfed product, meeting the versatile needs of these markets. That said, there has also been emerging demand for chilled grass and grainfed products, underpinned by improving chilled supply chains, increases in upmarket retail stores, and restaurants/hotels catering for tourists and expatriates. Key insights Source: DAWR, GTA The region is diverse in many aspects, and there is a vast difference in wealth (Singapore, the richest in the region, is more than 5 times wealthier than the poorest, Myanmar), in religion (Buddhist, Muslim, Roman Catholic and Hinduism) and economic/ political systems. Close monitoring of regulatory changes, non-trade barriers and supply chain development in each country would assist businesses to make informed decisions. Australia will continue to face competition from other beef suppliers, such as India and Brazil, in these fast growing countries. While the emphasis on price has been, and will remain, strong, Australia also has opportunities to differentiate itself from competition, capitalising on the industry s strengths credentials as a safe and high quality meat supplier with an integrated traceability system, natural environment, brand marketing and innovation throughout the supply chain. ' tonnes swt Malaysia Thailand Vietnam other value A$ millions mla industry insights South East Asia March 216 For further information visit us online at: or us at: marketinfo@mla.com.au

2 2 mla industry insights market snapshot SOUTH EAST ASIA March 216 Nay Pyi Taw 925, Bangkok 1 million CAMBODIA Phnom Penh 1.5 million MALAYSIA Kuala Lumpur 8 million ASEAN key cities and population THAILAND Market trends Population of the nine countries has been growing steadily, with the total by 219 anticipated to reach 392 million, up 6% from 214 (estimates and projections by IMF). Economic growth of ASEAN (Association of Southeast Asian Nations the nine countries plus Indonesia) heavily depends on China, but each country also has unique challenges and opportunities. Vietnam and the Philippines are forecast to register 6+% GDP growth in coming years (IMA Asia). The ASEAN Economic Community (AEC) was formed in 215, creating a single economic market that encourages free movements of goods and services, and increase competitiveness of the region in the global trade. The combined grocery retail sales value of the AEC is estimated to be US$472 billion (IGD Retail Analysis). LAOS Vientiane 79, VIETNAM Ho Chi Minh City 5.4 million BRUNEI Bandar Seri Begawan 5, INDONESIA PHILIPPINES Manila 2.6 million ' US$ GDP per capita (US$) Source: World Bank, IMF e 218f Consumer Singapore Brunei Malaysia Thailand Indonesia Philippines Vietnam Lao PDR Cambodia Myanmar e = estimate, f = forcast Various studies on SEA social and demographic trends and in-market intelligence suggest several key phenomenon in these countries, including: Urbanisation: SEA already holds some of the world s largest cities, including Jakarta, Manila and Bangkok. The flow of population to urban areas is expected to continue, with more than half of the entire regional population (including Indonesia) projected to be living in cities by 23 (Asia Research Institute). Change in family sizes: The region is shifting towards smaller households with fewer children, driven by the introduction of family planning programs, increasing costs of childbearing, and urban lifestyle led by city dwellers and younger generation. Mobile and online: Mobile ownership, and online access via mobile have become increasingly common in all countries, with 12 of the top 2 grocery retailers in ASEAN already operating the high growth online shopping channel (IGD Retail Analysis). SINGAPORE 5.4 million Jakarta 13.2 million

3 mla industry insights market snapshot SOUTH EAST ASIA March Insights from MLA research MLA conducted consumer research in Malaysia (ML) and the Philippines (PH) as a part of MLA Global Research 215. Key results from these markets include: Beef is seen as superior to other meats, but it is chicken that is bought and eaten most due to its affordable price and ease of cooking. Freshness is the most important factors when buying meat, closely followed by safety (ML) and nutritional value (PH). Local beef dominates consumption in both markets, and scores well in terms of variety, safety, freshness, halal and being less expensive. Australian beef is most well-known among ML consumers, while it ranks similar to US beef in PH. ML consumers feel they should limit beef consumption, but it is pork in PH that people are most concerned about limiting for health reasons. 12% of cuts exported from Australia to the region is high value loin cuts % Beef import tariff will be eliminated within ASEAN by 223* *Indonesia = % for boneless, 5% for other cuts bone-in, Cambodia = % for bone-in, 35% for boneless Sector growth Retail sector sophistication varies between markets, and consumers are exposed to both traditional ranging from wet markets to smaller, privately owned local shops and modern operations (both domestic and international corporations). The nine countries grocery retail sales are expected to increase 29% from 214, to US$32.1 billion by 227. Foodservice status in the region is similar to the retail sector, with its development stage varying from country to country. While conventional stalls and street vendors are still common in most countries, international franchises such as McDonalds, KFC, Pizza Hut and Subway are making inroads into markets. The sector is also experiencing significant changes, as many retailers are expanding eat-in spaces within their supermarkets, convenience stores and shopping malls. Consumption Per capita consumption of beef varies between SEA markets. While statistics and projections are not available for some countries, firm economic growth projected in the region including smaller and emerging players such as Cambodia, Laos and Myanmar indicates future consumption rise in the region as a whole. kg/per capita cwt Beef consumption China Indonesia e 219f Malaysia S ingapore* P hilippines Thailand Vietnam Source: Source: BMI, GIRA e = estimate, f = forcast (Singapore* = 22f instead of 219)

4 4 mla industry insights market snapshot SOUTH EAST ASIA March 216 Competitors There is limited information available for statistics concerning domestic beef production volumes of these nine countries. Beef self-sufficiency is generally low and most countries are importing more to meet growing demand for both commodity and quality meat. With regard to imported beef, major competitors to Australia in Malaysia, Singapore, Thailand and the Philippines markets are India (carabeef), Brazil, New Zealand and the US. While India may experience supply disruption due to its domestic issues, Brazil is expected to increase global exports by around 6% in 216 (Rabobank). SEA beef imports in 215 (by supplier) India Australia NZ Brazil US other Market access Besides independent free trade agreements (FTAs) with Singapore, Malaysia and Thailand, Australia covers trade access to the region under the ASEAN-Australia-New Zealand FTA (AANZFTA). The tariff on imported beef into Thailand will be eliminated through the Thailand Australia FTA (TAFTA). Under the TAFTA, the base tariff rate of 5% will be applicable for products imported beyond a specified quantity (Special Safeguard for Sensitive Agricultural Products). Trans Pacific Partnership (TPP) negotiations were concluded in October 215. While trade with TPP members in the region - Malaysia, Brunei, Singapore and Vietnam - are already covered under existing FTAs, the TPP will reinforce seamless flow of goods and services between these countries and Australia ' tonnes swt A$ millions Source: GTA *= Jan to Nov Malaysia Philippines* Singapore Thailand Thailand beef import tariff and special safeguard under TAFTA HS code 21 chilled 22 frozen Tariff (%) safeguard volume (tonnes swt) , , , , , , Source: DFAT

5 mla industry insights market snapshot SOUTH EAST ASIA March Beef tariff under ASEAN-Australia-New Zealand FTA HS code Tariff Philippines Malaysia Singapore Thailand Vietnam Brunei Cambodia Laos Myanmar 21 chilled Base 1% % % 5% 2% % 35% 3% 15% Current (216) % % % N1 5% % 2% 2% 1% Final % % % % (22) % (218) % % (221) % (223) % (22) 22 frozen Base 1% % % 5% 2% % 35% 3% 15% Current (216) % % % N1 5% % N2 2% 1% Final % % % % (22) % (218) % N3 % (223) % (22) N1: see table Thailand - beef import tariff and special safeguard under TAFTA N2: 2% for carcases & bone-in products, 35% for bone-less N3: % for carcases & bone-in products, 35% for bone-less Top cuts to SEA 215 AUSTRALIAN BEEF EXPORTS tonnes swt SEA TOTAL Philippines Malaysia Singapore Thailand Vietnam Brunei Cambodia Myanmar TOTAL 57,136 25,352 12,344 8,767 5,897 3, MANUFACTURING 28,324 21,14 5, NECK 3, ,182 1, STRIPLOIN 3, , OTHER* 2,911 1, SHIN/SHANK 2,131 1, CUBE ROLL/RIB EYE ROLL 2, BRISKET 2, CHUCK ROLL 1, THICK FLANK/KNUCKLE 1, BLADE 1, OTHER 7, ,799 2,11 1, OTHER* = mostly Hamburger (ground beef) Source: DAWR Meat & Livestock Australia, 215. ABN MLA makes no representations as to the accuracy of any information or advice contained in MLA s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content. Click here for MLA s Terms of Use