China’s beef industry holds ‘great potential’ for investors

In a report the food and agribusiness specialist has just released that analyses China’s rise within the world beef market, Rabobank predicts that China’s beef demand will grow by an additional 2.2m tonnes by 2025. 

Driven by the weak domestic production, albeit with strong demand, the Dutch bank expects beef will become the first agricultural sector where China has high integration with the rest of the world, in turn bringing rich dividends to investors in the Chinese beef industry.

In addition to the volume gap, the country’s beef market also demonstrates potential for value-added and branded beef products, the report said. 

Strong demand from the foodservice and retail market channels provides opportunities for both Chinese and foreign companies in the further processing sector, according to Pan Chenjun, a senior analyst at Rabobank. 

“Beef companies face the challenge of where to source consistent beef supply, but they also need to develop, and even create, new markets by delivering new products and addressing the needs for convenience, tailor-made value-added products​,” said Pan. 

To cope, Pan urged beef companies to participate across the entire supply chain through to processing to secure resources like grassland and take a strategic step to integrate the whole value chain. 

Although such outbound investment is just at an early stage, Rabobank expects more investments to come over the next decade. 

With Australia remaining the top consideration, South America is becoming a new area of interest while the US market still remains uncertain.