November 29, 2010

Hong Kong and China to finalise chilled beef pact

The Hong Kong and mainland China governments are in the process of finalising a market access protocol for the export of chilled beef from China to Hong Kong, with a high possibility of an agreement being signed before February 2011.

China is the only supplier of live cattle to Hong Kong for immediate slaughter and is the third largest supplier of frozen beef, although no chilled beef from China has been exported to this market. Following the opening of the Hong Kong market to China's chilled chicken in 2002 and chilled pork in 2006, Hong Kong is in the final stage of allowing chilled beef imports from the mainland.

Future imports of chilled Chinese beef are not expected to affect shipments of premium beef from Australia and the US, although the beef is likely to be competitive with freshly slaughtered beef and to some extent beef from Brazil and Argentina.

Despite this, high chilled beef price, following rising cattle and feed costs, reduced supply amid strong domestic beef demand in China, and the appreciation of the Yuan is expected to restrain the competitiveness of Chinese chilled beef in Hong Kong.