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As China's appetite for steak grows, Beijing ends its beef with imports

Written by Business World, on 25th Aug 2017. Posted in Agriculture

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China, the world's top meat market, is loosening longstanding restrictions on beef imports from major suppliers to feed the appetite of the country's growing middle class for steaks and ribs.

Over the past few decades, Beijing banned imports of beef from European countries and the United States during outbreaks of mad cow disease.

Worries about the disease are subsiding following more stringent inspections on foreign arrivals, while Chinese people are seeking healthier sources of protein and adopting more Western eating habits.

Beef is now the fastest-growing meat in China, outstripping stagnant demand for more widely eaten pork as consumers look to reduce fat in their diets.

But supplies are unlikely to keep up with demand given the high cost of raising cattle in China, prompting the government to rethink its import restrictions.

After years of lobbying, the United States succeeded in getting the curbs lifted in June, ending a 14-year ban triggered by a case of mad-cow disease in Washington state.

China also gave the greenlight for beef from South Africa and Ireland earlier this year, and on Tuesday said it is considering bringing in beef from Namibia.

China's beef purchases have soared in recent years, eclipsing Europe, South Korea and Japan since 2012.

Last year, it became the world's second-largest importer of beef after the United States, bringing in more than 800,000 tonnes worth $2.6 billion. That compares with just 6,000 tonnes in 2006. "Domestic supplies cannot catch up with the rising demand. There is not enough premium beef, either. And there are some food safety concerns in China," said Pan Chengjun, executive director of food and agriculture research at Rabobank in Hong Kong.

It's a victory for cattle ranchers locked out of the world's top market, but the increased competition from opening up the market may unsettle current top suppliers, Australia, Brazil and Argentina.

The latest steps come as Beijing aims to tighten imports of other commodities, sugar and broiler chicken, in a bid to boost the domestic industry.

China's beef and veal consumption has risen more than 10 percent over the past five years, while consumption of chicken and pork has actually declined in recent years.

Beef demand is expected to rise past 8 million tonnes this year, according to estimates by the U.S. Department of Agriculture, but domestic production is not rising at the same pace, hovering around 7 million tonnes.

Zhang Jianjun, purchasing manager with Sino-Australia Top Beef (Beijing) Co Ltd, a company that mainly imports beef from Australia, expected demand to rise by 10-15 percent in the next few years.

"In the meantime, it is getting more expensive to raise cattle," he said.

Cattle take longer to mature and farming requires large amounts of land, but China's rapid urbanisation over the past decade has reduced the availability of quality grassland.

Even for companies that turn to intensive farming, which can attract government subsidies, beef production remains expensive and domestic beef retails at well above international levels.

The average beef price in China is currently around 54 yuan ($8.11) per kg, more than twice the price of U.S. beef.

"The potential demand for beef is huge here in China ... if foreign beef comes to China at current prices, demand will grow a lot," said Pan. (Reuters)

Source: www.businessworld.ie


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