China to beef up on imports, says Rabobank report
In response to massive import volumes in recent years, the Chinese government launched a ‘Guideline for Beef Industry Development Towards 2020’ plan, which aims to increase production to almost 8 million tonnes in 2020.
However Rabobank believes that China’s increased beef production will still not be able to catch up, causing a growing gap between demand and supply. Research suggests that the structural supply deficit will force an increase in beef imports of nearly 20%.
Official statistics show that China’s beef cattle stock has been in continual decline since 2004, with a significant drop between 2006 and 2011. Until recently there has been a lack of government support when compared with pork and poultry, while beef cattle productivity is very low compared to other countries.
The Rabobank report reads: "China’s beef cattle supply shortage is a structural issue and the industry itself faces many challenges. It lags behind other major beef-producing countries in all the key aspects, such as genetics, breeding, productivity, farm management and grassland/feed resources."
In response to the supply shortage, beef prices in China have been on a significant upward trend – since 2000 beef prices have increased fivefold.
The challenges facing the industry mean that beef production is expected only to see marginal growth in 2014-15, meaning an increase in reliance on imports. Therefore it is predicted that total beef imports will reach 1.7 million tonnes by 2018, accounting for 20% of supply.
A ban on Australian fresh and chilled beef has been lifted, and the door may be opened to US and Brazilian beef too. The research suggests that China is to become an even more important destination for global beef in coming years.
