December 30, 2022


China now second largest East Asia market for US beef exports


The US Department of Agriculture (USDA) said China is now the second biggest East Asia market for US beef exports, with overall shipments expected to reach record highs thanks to a strong middle class and a developed e-commerce retail industry, South China Morning Post reported.


Data from the USDA showed US beef exports to China, including Hong Kong, reached a record high of US$2.23 billion in the first ten months of 2022, up nearly a third from the previous year.


Last year, exports to mainland China and Hong Kong surpassed US$2 billion for the first time.


East Asia has long been the most important market for US beef exports, with shipments to Japan totaling $2.02 billion at the end of October.


The recent USDA International Agricultural Trade Report said US beef exports to East Asia in 2022 are again on record pace after a record year in 2021, adding that Despite economic uncertainty caused by the COVID-19 pandemic, ongoing global supply chain challenges, and a competitive global beef market, US beef exports to East Asia were outstanding in the first half of 2022.


South Korea became the top US beef market last year, with tariff-free shipments beginning in 2026 and a safeguard duty ending in 2027. At the end of October, US beef shipments to South Korea totaled $2.32 billion.


According to the report, US beef exports to South Korea have the potential to reach US$2.8 billion by the end of the year, up from US$2.4 billion last year.


The report said East Asia's relatively robust middle class has supported demand for high-quality beef, and a developed e-commerce retail sector has provided suppliers with flexible avenues to promote beef products during the pandemic.


Despite recent increases in food prices, higher-volume shipments indicate that demand for beef products remains strong, and that East Asia's relatively stable middle class with high disposable household income has been willing to absorb the rising costs.


US suppliers face competition in China from frozen boneless beef imports from Brazil, Argentina, and Uruguay, with South America accounting for more than two-thirds of the Chinese market.


The report also noted strong growth in the fresh or chilled beef market, which primarily supports China's expanding hotel, restaurant, and institutional sectors, with Australia and New Zealand continuing to be top suppliers due to their proximity and free trade agreements.


China's imports of fresh or chilled beef from the US increased from US$12.56 million in 2019 to US$195 million in 2021, according to China's General Administration of Customs.


China's customs data showed beef imports from Brazil, Argentina, and Uruguay totaled US$6.82 billion, US$2.5 billion, and US$1.73 billion respectively in the first 11 months of 2022, compared to US$1.59 billion from the US.


Despite the tensions between China and the US, agricultural products have remained a bright spot in bilateral trade between both nations.


The Peterson Institute for International Economics (PIIE) said China's agricultural purchases reached 83% of the total commitment during the two-year phase-one trade deal, which expired in December 2021. This was despite the fact that PIIE referred to the overall agreement as a "failure," as China "bought none" of the additional US$200 billion in US exports it had promised. A February PIIE report showed China purchased only 57% of the US exports it agreed to buy under the agreement.


Despite the impact of the trade war in 2018 and 2019, US agricultural product exports to China have generally remained on an upward trend over the last five years.


Last year, beef and beef products were the sixth most valuable US agricultural product exported to China, valued at US$1.59 billion, with soybeans ranking first at US$14.12 billion.


The China National Bureau of Statistics said global inflation has contributed to an increase in food prices in East Asian countries this year, with food prices in China increasing year on year since April.


The USDA report said recent policies, such as the duty-free imports of beef into South Korea (100,000 metric tonnes) and the temporary reduction of beef import tariffs in Taiwan, both of which last through the end of 2022, demonstrate how policies to address rising food prices can support market access opportunities for US exporters.


-      South China Morning Post

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