March 10, 2008

China's beef prices to ease in second half of 2008 as production recovers

China's beef prices are estimated to relax in the second half of this year as more imported beef come into the market and production recovers, the USDA's Foreign Agricultural Service (FAS) reported.

In 2007, beef prices increased by 17 percent on average due to short meat supplies caused by swine blue ear disease in the latter half of 2006 and first half of 2007.

Previous forecasts state that China's beef prices will continue to climb in the first half of 2008 as domestic CPI (consumption price index) rises.

Prices in the second half of 2008 are forecast to drop due to additional imports, increased production and the government's price controls to mute inflation. 

China's top economic planner, the National Development and Reform Commission (NDRC), said in mid January 2008 that it will impose price caps on a range of products, including grain, edible oils, meat, milk, eggs and liquefied petroleum gas. 

Meanwhile, FAS also predicted China's year-on-year beef consumption in 2008 to increase by four percent to 7.68 million tonnes.

The current estimate is two percent higher than the previous estimate due to high economic growth, increased incomes, increased domestic slaughter, and large imports. 

Most of the increase in beef consumption is expected to come from dining away from home and ready-to-eat products as most Chinese do not cook beef at home.