LIMITED sheep supplies, coupled with increasing demand for protein in the Middle East, should ensure that prices and shipments from Victoria remain strong this year.

This is despite Australian exporters missing out on official contracts for the Hajj religious festival.

Feedback from the live-export sector this week was that the buying power for Australian sheep was beyond the numbers that are available, even at today's higher prices that have shipments averaging $80-plus a head.

Livecorp chief executive Cameron Hall said the fact that the Islamic Development Bank - a government body that funds the purchase of sheep for pilgrims attending the Hajj - had awarded its contracts to Africa this year wouldn't change the big picture in Australia.

"In my opinion if we had a pool of 5.5 to six million suitable boat sheep to go out this year, which we haven't, then they would be purchased into the Middle East region - that's the level of demand that's there," Mr Hall said.

The forecast this year is that live sheep exports will fall below the four million head mark due to Australia's drought and wool-price decimated sheep flock. This is down from 4.2 million last year.

Mr Hall, and other exporters, said Victoria and the eastern states would play a vital role in filling shipments in coming months.

The latest figures available for this year - January to May - show that Victoria's share of the total number of sheep exported live is running at 18.5 per cent, which is higher than the yearly average share of 12 and 14 per cent of all sales recorded in 2007 and 2008 respectively.

Chris Madden, livestock manager for EMS Rural Exports in the eastern states, said limited sheep numbers in Western Australia would continue to force ships to Victorian and South Australian ports for top-up loads.

"There has been a shipment nearly every three weeks out of Victoria in recent months as no one can really do a full shipment out of the West and I can't see that changing greatly," he said.

Shipments out of Western Australia appear to be running high for late autumn and winter, suggesting that demand (due to Ramadan falling in August this year) and the high prices being offered are dragging sheep out early in that state.

In May there were 384,382 sheep shipped out of Western Australia, which is significantly higher than the same month last year when 140,465 were exported live, and in May 2007 when the trade took 225,813 head.

The question this raises is: Can the eastern states expect some of the intense shipping action later this season that has pushed boat sheep prices into the record books in Western Australia over the past month or two?

Just last week Meat and Livestock Australia, on the topic of mutton prices hitting a record national average of 310c/kg carcass weight, reported how West Australian exporters had been paying "extraordinary" money of up to $92 for medium-weight ewes and to $134 for boat wethers.

None of the exporters would comment greatly on likely prices for Victoria later this year, but they did warn that the headline $100 a head-plus sales in the West were in the minority and the trade couldn't sustain such big money.

Although on the positive side most rated $80, which is much higher than recent seasons, as being sustainable due to increasing wealth in the Middle East.

But in something of a contradiction, price has been listed as a reason why the Islamic Development Bank in Saudia Arabia opted to award its government contracts for sheep for the Hajj to Africa this year.

These contracts form the backbone of the hundreds of thousands of sheep and lambs that are slaughtered during the Hajj each year, with each religious pilgrim required to purchase one animal that is then slaughtered and the meat given to poorer Muslim communities.

Steve Meerwald, general manager of Wellard Rural Exports in Perth, said price had been a factor in Australia missing out on the contracts for the Hajj this November - for the first time in a "number of years".

In the past Australian exporters have been awarded contracts for up to 500,000 sheep.

"It is a reflection of the cost of buying stock from Australia at the moment, as (Saudi Arabia) can source volumes of sheep from the horn of Africa at a price they are more comfortable with," he said.

The other issue is the fact that the date for the Hajj moves forward by 11 days each year, which meant Australian exporters would have had to have had shipments of fat-tail lambs on the water in October.

As Mr Meerwald said, October is too early for new-season lambs to be up to weight, and it is too late for old-season lambs. Such a logistical problem will continue over coming years as dates for the Hajj move back and sheep are required in September and then winter, and so on.

Exporters this week downplayed the impact of missing out on the contracts, stating it would have little affect on prices in spring given the overall supply of sheep was so small.

They also said that, from a Victorian perspective, it was no great issue as most producers in the eastern states don't vaccinate for scabby mouth, a requirement for Saudi Arabia.