CHINESE BEEF IMPORTS SURGE IN THE EARLY MONTHS OF 2016

Chinese beef and veal imports have surged in the first couple of months of the year. At 95,000 tonnes imports are more than double that in the corresponding period last year.

China continues to play a significant part in the global beef trade, as recently as 10 years ago beef imports were negligible. It was not until 2009 that the trade started to expand sharply. Imports, mainly in grass-fed beef, is dominated by Southern Hemisphere suppliers, with around a 90 per cent market share. They are cheaper supply sources. However, there has been a notable shift in the market shares for some suppliers in recent times.

Last year marked the return of Brazilian beef on the Chinese market, following the lifting of the BSE ban that had been imposed in 2012. Back in 2009 Brazil was very much the dominant supplier to the Chinese market with a market share of as much as two thirds. Shipments only restarted in August, but for the year as a whole Brazil still had a market share of 12 per cent, and in December it was the largest supplier to China. As expected, the resurgence of Brazilian product on the Chinese market has continued in the early months of 2016. With product displacing that from Australia and Uruguay, Brazilian beef accounted for well over a third of all Chinese imports in the two-month period.

China beef and veal imports

Looking ahead, the Chinese Quality Supervision, Inspection and Quarantine department has recently approved another five plants in Brazil to supply beef into China, bringing the total to 16. These are all located in major beef producing regions – São Paulo, Mato Grosso, Goias, Rio Grande do Sul and Minas Gerais states. Consequently, Brazilian beef exports to China are expected to grow significantly this year, underpinned by the weak economy, which will affect domestic beef consumption, with Brazilian consumers continuing to increase their consumption of cheaper protein sources, like chicken and pork.

Increasing its trade 20 per cent year on year, Australia had a market share of half only two years ago, now it is around 20 per cent. In the case of Uruguay, again while shipments are still higher year on year, up almost a quarter, their share of the market is notably lower.