Chinese beef demand has cooled but it’s still robust

Chinese beef demand has cooled but it’s still robust


Stock and Land Beef
 MLA’s general manager international markets Michael Finucan, based in Singapore, was home for Beef Australia in Rockhampton recently, where he presented an overview of the opportunities and challenges for Australian beef in China.

MLA’s general manager international markets Michael Finucan, based in Singapore, was home for Beef Australia in Rockhampton recently, where he presented an overview of the opportunities and challenges for Australian beef in China.

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Shifting consumer behaviours presenting opportunities.

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SHIFTING consumer behaviours and rising incomes are presenting solid opportunities for Australian beef in some of our largest and most diverse global markets.

Key to capitalising will be a detailed understanding of consumer trends and segmentation of the opportunities to target investment, according to red meat marketing experts from Meat and Livestock Australia based in the likes of China and South East Asia.

China was a large and complex market going through a period of incredible growth, according to MLA’s general manager international markets Michael Finucan.

Chinese demand for beef may have cooled off from previous highs but it is still large and robust.

“It’s a changing economy - there is greater urbanisation happening,” Mr Finucan said.

“The national average income is around US$6000 per year but in the big cities on the East Coast, incomes are over double that - those are the markets we need to target.

“China represents 20 per cent of the world’s population but only 6 to 7pc of the world’s water and agricultural land, so they need to import.”

Mr Finucan described trade relationships between Australia and China at the moment as  frosty.

“It’s much more important to us than it is to China,” he said.

“China is Australia’s number one trading partner but we are only their 14th. This translates to some of the problems we have.”

He was referring to the “modest progress in chilled beef” since a deal was struck more than a year ago between the Premier of the People’s Republic of China Li Keqiang and Prime Minister Malcolm Turnbull to take the number of Australian plants and cold stores approved to supply this market from 11 to 70.

Despite it being heralded as a ‘watershed moment’ for Australian beef at the time, only a few registrations have since eventuated.

China’s short term ban on beef from some plants last year, due to labelling issues, is another example of the challenges Australian processors are dealing with.

Prominent exporter Lachie Hart said beef processors “would have hoped our government would have had more favourable relationships with what is such an important market, not just to us but all agriculture and manufacturing industries.”

“The challenges we are experiencing is a direct result of that relationship,” he said.

Rabobank’s latest beef quarterly shows China’s official beef imports rose 32pc year-on-year in the first quarter of this calendar year. While Brazil maintained number one position, imports from Australia have rebounded after the slip in supply last year, due to the improvement in our supply situation.

Meanwhile, South East Asia is a growth market with beef consumption set to rise 15pc in the next few years, MLA’s Natalie Isaac said.

“It’s our fourth largest markt, representing 11pc of all boxed beef we export,” she said.

“But where the market is unique is that 33pc of all Australian manufacturing beef exported goes here with the bulk going to the Philippines.

“More than a quarter of offal we export goes to SEA, predominantly to Indonesia.”

The story Chinese beef demand has cooled but it’s still robust first appeared on Farm Online.

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