Demand from China has helped the Australian state of Victoria lift its agricultural exports by 5% in 2012-13 to a record A$9.4bn, a new report from the state’s government has revealed.
According to the 2012-13 Victorian Food and Fibre Export Performance Report, China continued to be the top destination for food exports from Victoria, which is Australia’s largest food and fibre exporter.
Exports to China grew by 73% on the back of strong demand from the country’s rapidly expanding middle class for Australian dairy, grain and meat products, going from A$506m in 2011-12 to A$875m in 2012-13, the report said.
According federal government data, Australian red meat exports to China set new records for beef and sheepmeat in 2012-13 with 162,139 tonnes of shipped weight product headed to the Chinese shores.
The report pointed out that Victorian meat exports have increased significantly over the previous 12 months and the state is a growing supplier of beef and number one supplier of lamb and mutton.
Meat on the menu
Peter Hunter of the Trade and Investment Branch at Victoria’s Department of Environment and Primary Industries (DEPI), said that the demand for meat is being fuelled by China’s middle-class population, which amounts to 157 million and is predicted to surpass the size of the US middle class in the next 10 years.
“Major factors driving the increase in consumption of red meat include rising real income, rapid urbanisation, changes in lifestyle such as eating out of home, availability of new cooking methods and changes in consumer tastes,” said Hunter.
“The rise in personal income levels has seen Chinese consumers demanding foods of superior quality and also consuming imported foods as a result of safety concerns related to foods produced locally in China,” he added.
According to Hunter, Chinese beef and sheepmeat producers are facing challenges in increasing their meat production, given constraints associated with available arable land and water as well as high input costs for fertilisers and grains and increasingly
Hunter said that total Chinese meat consumption is anticipated to grow at 1.6% annually over the next decade. “Chinese pork consumption is forecast to be at 34kg/capita, while beef per capita consumption is expected to reach 4kg/capita.
“Whilst beef and sheepmeat (2.9kg/capita in 2009) consumption is relatively low, it highlights the significant opportunity to meet growing consumer demand for more diversity in their diet over such a large population base,” he said.
Dairy and grain exports also booming
Nicki Marks, also of the Trade and Investment Branch at DEPI, pointed to other bright areas for Victorian food exports to China, saying that it is the largest potential market for Victorian horticulture products.
“With recent market access for table grapes and citrus into China, figures increased from A$1m of exports in 2011-12 to A$10m in 2012-13,” said Marks, adding that the market will grow further as Australian growers and exporters learn how to manage the protocol conditions and meet importer demands.
“Grain imports have also increased significantly from AU$6m in 2008-09 to AU$249m in 2012-13, primarily in cereals and oilseeds. As urbanisation [in China] continues it is likely more arable land will be lost and grain imports will increase further,” she added.
Marks pointed out that the market for dairy products is growing significantly, especially among younger people, on the back of rising incomes and changing tastes, and said that exports of milk and cream were up from A$74m in 2011-12 to A$109m in 2012-13.
“Imported dairy products are taking a significant slice of the market because of production constraints in China and the perceived safety of imported products amongst Chinese consumers,” she said.