China’s Beef Imports Continue to Soar
Australia is set to resume free trade agreement negotiations with China soon, hoping to rejuvenate talks that have gained little traction since they began in 2005. But even without an FTA, Australia is the largest beneficiary of China’s booming beef demand. China’s imports of Australian beef increased nearly 1,200 percent in volume (63,061 mt) and more than 900 percent in value ($290.9 million) over the first half of 2012, making China recently surpassed South Korea as the third-largest destination for Australia’s exports. Although frozen manufacturing beef still accounts for the majority of volume, China is now taking a wide range of Australian beef products, including chilled cuts. Since last fall, Australia has been in a unique position to supply China’s booming demand because of a drought-induced increase in slaughter. Growth to China has also helped offset slower sales to Australia’s top markets, Japan and the United States. Australia holds about 47 percent market share in China by volume and 51 percent by value.
“Australian beef has become much more visible at retail and foodservice outlets throughout China, and prospects for further growth in the second half of this year are strong,” said Joel Haggard, USMEF senior vice president for the Asia Pacific. “This is especially true now that the authorities are being more aggressive in their enforcement of beef import restrictions.”
Uruguay is in the No. 2 position in China, as imports through June totaled 36,320 mt valued at $134.3 million – increases of 714 percent and 831 percent, respectively, over the 2012 pace. China was the largest destination for Uruguayan in the first half of this year.
New Zealand is the only major beef supplier that has an FTA with China, which lowered its import duties on New Zealand beef to 4 percent, compared to 12 percent paid by other suppliers. This is not a huge price advantage, but it has helped New Zealand achieve third place in the market. First-half imports from New Zealand totaled 22,933 mt (+855 percent) valued at $99.2 million (+904 percent).
Though a limited number of plants have been approved, Canadian beef has moved into the No. 4 position in China with first-half imports totaling 10,088 mt valued at $34.5 million – up dramatically from the minimal totals recorded in 2012.
China’s beef prices are 31 percent higher than a year ago and have increased 60 percent since July 2011, indicating tight domestic supplies and a growing need for imported product. With booming demand and very little advancement in domestic production, China’s list of beef suppliers seems destined to grow. Argentina exports a small amount of beef to China, and China has been in discussions with India about imports of buffalo meat. Several beef-producing countries in Europe are also seeking approval to export to China.