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Australian food retail sales show signs of life; NZ up on beef processing

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In its latest Agribusiness Monthly for November 2013, agribusiness banking specialist Rabobank reports on the climate and agricultural conditions, commodity price updates and commentary on the latest sectoral trends and developments.

The Rabobank Agribusiness Monthly November 2013 covers the impact of climatic conditions in October with low rainfall recorded for Australia; Australian retail sales showing signs of life; New Zealand doing well on the processing front in both beef and sheepmeat; Chinese supply crisis delaying price adjustment in dairy; low global stocks underpinning grains and oilseeds markets; local currencies negatively impacting sugar prices; declining cotton prices; higher global supply of wine; fertiliser prices under pressure as importers remain cautious about buying in large quantities; and higher prices for NZ coarse wool.

In terms of rainfall, October was below the long term average nationally except for Tasmania, which recorded above average rain. A drier than normal season is more likely for most of north-eastern Australia.

Australian retail sales grew strongly in September 2013. Growth was fairly mixed across the retail sector with household goods down and clothing up. The two largest Australian grocery retailers reported their sales results for Q3 2013 with Coles outpacing Woolworths in store sales growth.

Cattle prices in Australia saw a consistent decline through October. However, October was the third month in 2013 where exports exceeded 100,000 tonnes swt, driven mostly by US, Indonesia and China. Total Australian lamb exports during October were the highest monthly on record. China now accounts for 18% of Australia’s lamb exports and 37% of mutton exports. In the dairy industry, unfavourable seasonal conditions in some parts are impacting Australian milk flows.

In grains and oilseeds, ASX Jan wheat prices are range-bound with prices remaining firm relative to CBOT prices. Australian canola prices continue to be pressured by the pending harvest, which is expected to produce over three million tonnes for the second year in a row.

The complete report is available on the Rabobank website.

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