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COMMENTARY & ANALYSIS


April 12, 2018

 

China's beef imports seen to rise as demand outpaced by production

 

 

China's expected 1% increase in beef production this year to 7.35 million tonnes won't be enough to meet the expected 3% increase in domestic demand to 8.4 million tonnes, leading to higher imports, the latest forecast of the US Department of Agriculture (USDA) said.

 

The USDA said in its latest livestock and products semi-annual report that one primary factor driving this increase is the combination of low milk prices and high beef prices. Because of low milk prices, dairy farmers are slaughtering their less productive dairy cattle for beef processing at a faster rate than usual, it said.

 

China's increasing consumption of beef is being fuelled by the equally increasing Chinese living standards and urbanization. From 5.8 kilogrammes in 2017, China's per capita beef consumption is estimated to reach 6 kg this year, although this is still well below the world average per capita consumption of 8.6 kg.

 

The USDA noted that high-quality and branded beef products have become popular in China, facilitated by e-commerce platforms. "In fact, the majority of steak cuts for home consumption are from e-commerce platforms, not retail supermarkets", it claimed.

 

With demand outpacing production, the USDA forecasts imports will continue increasing to reach 1.05 million tonnes this year, up 8% from 2017. At present, China imports beef from 14 countries, with beefs from the US, Canada and Australia deemed as "value products" and commanding a premium price.

 

Exports from South American countries are deemed "volume products" and accounted for about 70% of total imports in 2017. Brazil was the leading exporter in 2017, but the USDA report estimates that exports from the South American country will decrease in 2018 due to continued investigations of its meat industry and regulatory system.

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