August 10, 2015


China's influence in global beef market growing with demand



Pork-loving China had not been known to be a large importer of beef, but since 2012 the country has seen a substantial rise in beef import demand due to strong economic growth and sharp declines in domestic production. "China now imports more beef every month than it did in an entire calendar year in 2011. In the first half of this year, imports totaled nearly $910 million--up 28 percent from a year ago", said Philip Seng, president and CEO of US Meat Export Federation in a recent article posted on the USMEF official website.


The growing figures for China's beef imports have also been acknowledged in agricultural lender Rabobank's latest report on China's role in the global beef market. Rabobank predicts that beef demand in the world's second-largest economy will grow an additional 2.2 million tonnes by 2025. Already, China is the world's fourth-largest beef consumer after the United States, Brazil and the European Union.


The Rabobank report says that China's beef sector, driven by weak domestic production and strong demand, is likely to become the first agricultural sector where China has high integration with the rest of the world.


Moreover, it says Chinese investors are expected to play an influential role in the global beef market over the next decade, adding that Chinese beef companies aim to participate in the whole supply chain--from farming to processing--to secure resources such as grassland and to take a strategic step to integrate the whole value chain. During the process, both big companies and medium-sized companies will be actively participating in cross-border investments, the report says.


Although such outbound investment is just at the beginning stage, Rabobank expects more investments to take place in the coming decade. With Australia remaining as the top consideration, South America is becoming a new interesting area and US market still remains uncertain, Rabobank says.


US shut out


At the same time, major beef-producing countries are eyeing the opportunities in China's beef market, which at present relies on imports, particularly from Canada, the leading exporter of beef to China, as well as Australia, Uruguay and New Zealand.


The US, the largest beef producer in the world, has been shut out of the Chinese market since 2003 due to BSE (bovine spongiform encephalopathy), or mad cow disease, issue. Despite this, China still affects the prices US beef cuts in other Asian destinations because of its significant influence on global beef trade, according to USMEF's Seng. "For the US beef industry, the lost opportunity due to our lack of access to China is currently estimated at more than $100 per head", he said in his article, titled "Access to China Key Factor in Maintaining Meat Export Growth".


Meanwhile, he said, Australia, Uruguay, New Zealand, Argentina and Canada are all gaining a strong foothold in China. Last May China also ended its three-year import ban on Brazilian beef, which was imposed due to mad cow disease issue. The reopening of the Chinese market to Brazilian beef could mean an annual US500 million worth of bonanza. Before the 2012 ban, Brazil exported$1.5 billion of beef to China yearly.


China also reopened its market to Irish beef after a 17-year ban, but still shuts out other EU member-countries over BSE concerns. --Rick Alberto (

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