More Australian beef set to enter China

Australian beef suppliers and exporters are poised to feed Chinese consumers with more fresh meat than ever, thanks to the bilateral agreement signed by the two countries in March.

The new trade agreement was reached by the two sides during Chinese Premier Li Keqiang's official visit to Australia in late March. The deal allows Australia to be the first and only country to have complete market access to supply chilled or fresh meat to China, a nation where pork is the most consumed meat.

The new agreement is expected to increase beef import value from Australia to China by $400 million a year.

Australia has for the past decade been the leading exporter of the meat to China. However, with the increase in the number of exporters to China, the market share of Australian beef dropped from 52 percent in 2013 to 34 percent in 2015.

"That agreement sets up a platform to open up more access. The main breakthrough is Australian exporters can now send chilled meat here, as opposed to before when it was only frozen meat. This will be the biggest opportunity," said Michael Finucan, general manager of Meat and Livestock Australia (MLA), International Markets.

Fresh meat has been one of the best-selling and fastest-growing sectors in China. Finucan attributed this to the fact that more Chinese consumers are cooking beef at home instead of eating it at restaurants, pointing out that retail sources such as supermarkets have been a key growth engine.

Just days after the conclusion of Li's visit, MLA and its counterparts from the dairy and wine industries held an event in Shanghai themed "Taste Australia". Attended by retailers, restaurateurs and chefs, the event was hosted by Australian celebrity chef Tim Hollands and featured a cooking show that displayed the quality of the country's produce.

China is now the fourth largest importer of Australian beef, both by value and volume. Statistics from MLA showed that beef exports to China hit AUD$1 billion ($751 million) in 2015. MLA also projected that China's beef consumption would reach 8 million tons by 2020.

According to industry experts, domestic supply of beef in China has been stagnant, if not declining, because of rising labor costs. The number of cattle reared for beef in China has stayed around 150 million since 2014.

The Australians are set to face fiercer competition, with other nations like Brazil and New Zealand joining the competition. In addition, China's Ministry of Agriculture had in September 2016 lifted the ban on imports of US bone-in-beef and boneless beef for livestock under 30 months, with conditions.

"China is a very big market for us, so the opportunity for us is to supply the premium sector and that's where we are looking to expand. So we are not so worried about the total volume," said Finucan, addressing the problem of competition.

(China Daily USA 04/14/2017 page7)