China is one of the biggest beef importers in the world. In the first nine months of 2017 imports totalled 503 thousand tonnes, a 15% increase compared to the same period last year. Compared to the same period in 2015, this is a 57% increase. Over the last ten years beef imports to China have increased significantly from the lows of 1.2 thousand tonnes in 2006, to 580 thousand tonnes in 2016.
Uruguay and Brazil have the largest market share of Chinese beef imports. In the year-to-date China imported 147 thousand tonnes of beef from Uruguay, a 30% increase from the same period in 2016. Imports to China from Brazil increased 9% year-on-year, to 139 thousand tonnes in the year-to-date. Australia has lost market share since 2015. In July this year, China put a ban on importing beef from five Australian processing plants. The ban has since been lifted however it did cause further declines in quantity of beef sent from Australia to China. Shipments of beef from Australia to China declined by 4% during the first nine months of this year compared to the same period last year, and stood at 83 thousand tonnes.
Beef prices in China have been similar to those recorded in 2016, while Chinese mutton prices have been on an upwards trend since the middle of August driving higher imports. The increase in mutton prices may eventually cool sheep meat demand in China if other proteins, particularly beef, become more price competitive. Pork is typically the cheapest red meat in China and historically beef has been the most expensive. During the week ending 14 November Chinese wholesale beef prices averaged 54.5 yuan/kg (around £6.20/kg), a 2% rise on the same week last year.
China is a large market, and a small change in Chinese consumption habits can have a huge effect of the global supply and demand balance. With the US, Australia and Brazil all increasing beef production and exports at the moment, if global beef prices do come under pressure, they may find some support from Chinese demand at the level where beef competes with increasingly expensive domestic sheep meat.