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"Beef has traditionally been sold through wet markets but the percentage of beef sold through 'organised retail’ is forecast to grow from 2 per cent in 2010 to 40 per cent in 2020."
Michael Whitehead, Director Agribusiness Research, ANZ
- Recent five year plans have taken China’s beef industry from traditional farming to more structured and large scale production
- China currently has low beef consumption at around 4.1kg per capita but with 27 million people entering middle class status every year, beef demand is increasing. Consumption is forecast to rise from 5.9 million tonnes in 2013 to 10.1 million tonnes in 2030
- Beef has traditionally been sold through wet markets but the percentage of beef sold through “organised retail" is forecast to grow from 2 per cent in 2010 to 40 per cent in 2020
- Official Chinese beef imports grew four fold in 2013, with a contributing factor for this increase being safety issues in other meat products - poultry was affected by H7N9, while pork consumption slowed down due to ‘The Floating Dead Pig’ incident
- Australia is China’s main supplier of official beef imports, accounting for 57 per cent, but there are also large volumes entering China through “grey channels”, in particular US and Brazilian beef via Hong Kong and Indian buffalo meat via Vietnam.
- In 2013, 81 per cent of China’s beef demand was supplied through domestic production but that ratio is forecast to drop to 62 per cent in 2030 - importantly, the ration supplied through the grey trade is forecast to drop from 12 per cent to 1 per cent.
- The reliance on beef and cattle imports presents a significant supply side opportunity for global players, particularly for Australia
- Australia’s beef sector is well placed to potentially provide China a range of cattle and beef products through business strategies from trade through to strategic partnerships
- Despite the early export success of Australian beef exports to China in 2012 and 2013, the challenge to maintain this market share is immense: to achieve a “high case” export scenario the Australian beef requires annual productivity growth of between 2.5 per cent and 2.9 per cent - well above the current 0.5 per cent.
- Should the sector achieve the high productivity growth targets, it could result in a total export value of $102.9 billion to 2030 or an extra $14.2 billion compared with a scenario without the lift in productivity.
To read an abridged version of the report, 'China's Great Beef Challenge', click here.