July 14, 2020

 

Good performance of Australia's beef cattle, meat exports to China despite recent tensions

 

 

Trade between Australia and China stays steady despite recent political tensions, and that is also reflected in Australian beef cattle and meat exports to China.

 

Australian exports to China, excluding services, rose 8% from April to A$13.6 billion (US$9.4 billion) in May, according to international trade data released by the Australian Bureau of Statistics earlier this month.

 

Australian beef cattle and meat exports to China have performed well even though China has banned imports from four Australian abattoirs in May.

 

The first batch of tariff-free live cattle were exported to Hainan, the island province that is expected to become a new free-trade port for China, last week.

 

Animal husbandry firm Hainan Huaao, which imported the mainly Angus beef cattle, will produce the meat for sale in Hainan, Guangdong, and Guangxi provinces. It also plans to import another 10,000 live cattle from Australia in the second half of the year, according to a report by the official Xinhua News Agency.

 

Two weeks ago, the amount of Australian beef sold to China exceeded the free-trade safeguard volume of 179,687 tonnes, and as a result, future exports of six lines of beef are now unable to attract preferential tariffs under the China-Australia free trade agreement.

 

There has been a shift in the origin of exports to China, as temporary suspensions placed on four Australian plants in May now appear to be affecting export volumes

 

Tariffs will rise to a range of 12% to 25% from the previous range of 4.8% to 10%, which could hurt exports for the rest of the year until tariffs are reinstated to the lower preferential rates in 2021.

 

In the six months to June, total frozen and chilled beef exports from Australia to China rose 3% compared to the same period last year, but fell 30% between May and June, according to red meat and livestock industry research group, Meat and Livestock Australia.

 

Compared to the same period last year, June's exports to China dropped 25% due to the ban on the four abattoirs.

 

"There has been a shift in the origin of exports to China, as temporary suspensions placed on four Australian plants in May now appear to be affecting export volumes," Meat and Livestock Australia said.

 

"The suspended plants are understood to represent around 20% of beef exports to China, with three of the four plants being located in Queensland. Of all the beef exported to China last month, Queensland volume share dipped to 45%, while Victoria and New South Wales both accounted for greater market share than usual."

 

- South China Morning Post