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Could Chinese Beef Imports Double over Next Five Years?

22 March 2014

BordBia

Over the last decade, income per capita in China has risen rapidly, creating a burgeoning middle class, writes Alan O’Brien from the Shanghai Office of Bord Bia, the Irish Food Board.

As disposable income increases, the dietary habits of consumers also tend to shift in turn to incorporate a higher level of protein consumption.

In China, pork remains the stable protein, the pricing of which is heavily monitored by Chinese authorities to ensure that the country’s lowest demographics can avail of meat.

As a recent report by Rabobank highlights, with rising incomes in China, consumer patterns of expenditure are shifting rapidly.

While pork still remains the staple source of protein, in terms of overall meat consumption, it has dropped to from 80% to 65% (1985 – 2011).

Strong Increase in Chinese Beef Imports Anticipated

The shares of beef, sheep meat and poultry continue to increase rapidly, spurred on by an increasingly affluent consumer base, as well changing consumer perceptions.

As Rabobank highlights, products such as beef and sheep meat will continue to be perceived by consumers as “greener,” more nutritious and of a higher quality than pork.

As Rabobank’s recent report highlights “China has a structural beef shortage,” stemming from losses in 2006, which prompted many farmers to leave the industry and opened the market further to increased imports from key players including Australia, Uruguay, Canada and New Zealand.

As the report also highlights, stagnated domestic supply, combined with increasing demand from consumers, has had a dramatic impact on the pricing of beef at retail level; with flat pricing between moving from 10-20 CNY/kg over the 2001 – 2006 period to just under 60 CNY/kg in Jan 2013.

It is clear the Chinese beef market will continue to present a key opportunity for international beef producers, including Ireland. It is hoped that continued negotiations between Chinese authorities and Department of Agriculture, Food and the Marine may potentially open the market to Irish beef; however, gaining market access in China remains a lengthy process.

Grey Channel in Hong Kong

The data below highlight mainland China’s beef imports over the last three years, with Australia, New Zealand and Uruguay taking the lion’s share of imports.

The data below also highlights beef imports into Hong Kong, showing increasing Irish exports. It must be noted that this data does not accurately represent total demand for beef in Hong Kong but is an indicator of increasing demand for beef in China.

Bord Bia china 1 chart

bord bia china 2 chart

bord bia china 3 chart

March 2014

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