CME: China Beef Buying Grows 1750 per cent29 July 2013
US - Rapid movement in Chinese red meat market demand is expected and delivering huge economic benefits, but not for US beef sellers, according to Steve Meyer and Len Steiner.
Unfortunately, so far the explosion in Chinese beef demand has not benefited US beef producers as much as it could have, write Mr Meyer and Mr Steiner.
The rise in prices in mainland China has likely driven the surge in demand for US beef in Hong Kong.
However, as Chinese authorities have become more diligent in controlling the provenance of beef entering their borders, and the duties that come from it, it appears to have limited US beef exports to surrounding countries, especially Vietnam.
US beef exports to Vietnam in 2011 and the first half of 2012 averaged about 3800 MT per month. So far this year, however, exports to Vietnam have averaged about 570 MT per month. Official China beef imports have exploded, largely to the benefit of Australian beef producers.
In the first six months of the year, China imported 59,596 MT of beef from Australia, compared to just 3226 MT during the same period a year ago, a 1750 per cent increase. These are official Chinese statistics and may differ slightly from the export statistics from Australia.
China imports from other countries, such as Uruguay and New Zealand are also up sharply. Imports from Uruguay were similar to those from Australia in the first six months of the year but so far volume is up 800 per cent and China is now the top market for Uruguayan packers, accounting for almost a quarter of all their exports.
China has not imported any Brazilian beef so far this year after the country put a ban on Brazilian products following the December 2012 BSE announcement. Missing in the chart above is US beef, which still is banned from entering Mainland China.
While US authorities have worked hard to open the Japanese market, unfortunately trade with China has been suspended for the past 10 years following the BSE outbreak. China beef demand will likely persist, especially since the country is unlikely to fill the expanding demand through domestic growth. It is a market that should greatly benefit US beef producers, once the politics of trade has been put on a constructive path.
TheCattleSite News Desk