Chinese firm approved to buy Aussie cattle in time for New Year

By Mark Godfrey

- Last updated on GMT

Chinese New Year is celebrated on 16 February and is a key sales period for food traders
Chinese New Year is celebrated on 16 February and is a key sales period for food traders

Related tags Cattle China Beef Livestock

A trading company in Beijing has been given the green light to commence imports of live Australian cattle for slaughter, with the first shipment due at the end of January, in time for the consumption rush at Chinese New Year.

Beijing Xin Mao Hua Import & Export Co, better known as an importer of breeding livestock and poultry, is waiting on a shipment of 2,300 cattle, set to arrive by the end of the month. The cattle will arrive at the port of Huanghua in Hebei province. A two-hour drive from Beijing, the port has heretofore been known as the country’s busiest shipment point for coal. Under Chinese rules the cattle have to be slaughtered within 14 days at a Xin Mao facility near the port.

Beijing Xin Mao said importing live cattle would help ensure the taste and quality was preserved: “Imported frozen meat suffers from long shipment and travel times... we will be supplying fresh meat,​” according to a statement from the firm.

Beijing Xin Mao is also seeking to benefit from the combination of low-cost Chinese labour and low-cost Australian pasture. Australia has had access to China for live cattle imports since 1998, but it was only in 2015 that the two sides signed a protocol allowing the shipment of live beef cattle for slaughter.

Free trade buoys sales

The shipment to Huanghua port comes after Australia-based Elders Co sent its first shipment of slaughter-ready Angus cattle to Baozhu Food Co, a subsidiary of the Tai Xiang Group, which supplies Shanghai caterers. The firm, which had earlier sent cattle by air, supplied the cattle to Shidao port near Shanghai.

Australia has a significant advantage in its free trade deal with China, which ensures a 10% tax on its cattle imports (into China) has dropped to 4% and will slide to zero from January 2019. The potential value of live cattle shipments to China has been put at AUS$103 billion between 2014 and 2030 by ANZ Bank, but it remains to be seen if Australia – which ships large numbers to Indonesia and Vietnam – has the cattle numbers or competitiveness to realise that cash figure.

Chinese beef researchers and executives, as well as officials, have sought to build processing jobs in China while also getting value from the by-products like skins and offal. Offal items command high prices in China: the Hengdou Agriculture Co beef processing group is selling bulls’ penises at RMB150 each on its online stores, marketing the product as a premium ingredient for Chinese New Year soups. Tripe from ruminant stomachs is also a favourite item on menus at Chinese restaurants.

Even as China shifts its focus to live imports for slaughter, Australia isn’t the only supplier: Uruguay also has a protocol allowing it to supply live cattle for slaughtering and, last year, 5,900 cattle were shipped from Montevideo to the Tianjin port near Beijing. As with cattle from Australia, the cattle must be killed within 14 days of arrival and must be quarantined for 30 days prior to shipment.

Less than 4% of China’s overall beef supply comes Australia. To put the trade in context, in 2017 China was the world’s second-largest producer of beef in carcase weight: 7.8 million tons compared to Australia’s 2.12 million tons. However, China was also the world’s top importer of beef last year at 925,000 tons ahead of second-placed Japan on 780,000 tons. Australia was the world’s third-placed beef exporter last year, behind India and Brazil.

The meat processing enterprise has been welcomed by Huanghua Port management, which has been under pressure as the port, owned by coal giant China Shenhua Energy, has been struggling amid China seeking to reduce coal burning to clean up chronic air pollution.

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