China's beef demand continues to soar

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Publish time: 3rd October, 2013      Source: www.cnchemicals.com
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October 3, 2013

   

   
China''s beef demand continues to soar
   
   

   

For the first half of this year, Canadian beef exports to China totalled 10,088 tonnes, a three-fold increase from last year''s amount for Canada, as reported by the North American Meat Association (NAMA).

   

   

As the NAMA report points out, "Rising incomes and expanding urbanisation are fuelling the demand for beef while local production is not able to increase quickly enough."

   

   

However, the tripling of Canada''s exports to China is based on a very low total from 2012, when Canada had just re-entered the market. The huge growth in China''s beef imports has come from Australia and Uruguay- and, to some degree, New Zealand. And the potential continues to grow.

   

   

As Joel Haggard, senior vice president overseeing the Asia Pacific region for the US Meat Export Federation (USMEF), pointed out that when China closed to US beef as a result of the December 2003 bovine spongiform encephalopathy (BSE) case, beef was still a minimal part of the Chinese diet. But this has changed dramatically in recent months.

   

   

He was referring at that time to China''s over-year beef import volume of 2012, which exploded by 164% to 70,574 tonnes, while import value grew 150% to US$281.4 million. More recently, however, the surge is even more impressive.

   

   

USMEF says that through August 2013, China imported 193,454 tonnes of beef valued at US$820.6 million- more than 700% above the first eight months of 2012. Presently, China''s importers are purchasing about as much beef every month as they imported in the entire calendar year of 2011, says Joe Schuele, USMEF director of communications.

   

   

Australia is the largest beneficiary of China''s booming beef demand. China''s imports of Australian beef through August increased nearly 1,100% in volume (92,680 tonnes) and 900% in value (US$426 million) over last year''s pace, recently surpassing South Korea as the third-largest destination for Australia''s exports.

   

   

Uruguay holds the number two position in China, as imports through August totalled 52,866 tonnes valued at US$197.3 million – increases of 570% and 668%, respectively, over 2012. China is now the number one destination for Uruguayan beef, accounting for about one-third of its total export volume.

   

   

New Zealand is the only major beef exporter that has a free trade agreement with China, which lowered the import duties on New Zealand beef to 4%, compared to 12% paid by other suppliers. This preferential duty rate translates into a price advantage that has helped New Zealand achieve third place in the market, with imports through August totalling 30,745 tonnes, an increase of 637% and a value of US$134.2 million, a 730% increase.

   

   

Although Canada has only a limited number of its plants approved for export to China, Canadian beef holds the number four position with China''s imports through August totalling 13,025 tonnes valued at US$43.9 million.

   

   

Argentina also exports a small volume of beef to China- through August it totalled 4,117 tonnes valued at about US$19 million.

   

   

Schuele says the US government has raised the issue at very high levels in the Chinese government, emphasising that the negligible risk designation for BSE of the US should remove any remaining concerns that China may have about the safety of US beef. But the battle goes on, with the next opportunity to address the issue at high levels coming later this year at the meetings of the US-China Joint Commission on Commerce and Trade.