Australian beef and exports to China, will gain as rising incomes and increasing urban populations boost consumption, according to a report by Rabobank Groep NV.

China may become a solidly growing secondary beef market for Australia as demand is also being boosted by changing diets and declining local production, Rabobank senior analyst and report authour Wendy Voss said.

Australia, the second-largest beef shipper after Brazil, may send about 78% of its exports to Japan, the US and South Korea this year, according to industry group Meat & Livestock Australia. Japan, the largest market, may purchase 330,000 tonnes, the group said in a report in February.

"While the Chinese meat market will continue to grow in importance, it will not be another Japan, at least within the next decade," Voss said. Volume increases were likely to be in the "tens of thousands" of tonnes she said, without giving a specific forecast.

Beef shipments to China last year were 13,000 tonnes, or about 1.5% of Australia's beef exports, according to Voss.

Cattle and sheep output in China had become less attractive compared with grains or intensive livestock because of reduced government support, uncertain markets and rising costs, she said. China is the world's largest market for pork, seafood and sheepmeat, and the fourth-largest for beef, according to Rabobank.

Negotiation of a free-trade agreement with China would help support Australia’s position in the market, the report said.