October 16, 2003

Forecasted Price Increase of Cattle in China

Price of yellow cattle in China has rebounded since 1999 and remained on an upward trend till end 2002.  Currently, prices of live cattle increased from RMB 6.0 /kg to RMB 9-10 /kg. It is forecasted that prices remain strong for the next two years. What's more, the profits for raising cattle would not decrease until 2010.

Reasons are analyzed as follows:

1. The farm cattle will decrease due to popularization of the agricultural machine;

    

2. According to statistics, per capita possessing volume of beef in 1999 was only 2.82 kg; this figure is less than one-third of the world average. The consumption of beef increases as living condition in China improves;

    

3. After entering the WTO, China has obvious price advantages of cattle in the international market. China's 'Producer of Green Beef' will also prove beneficial for export.