Chinese beef imports will be challenging

24 Aug, 2015 02:00 AM
Comments
0
 

BEEF exports into the Chinese market may be harder than expected, according to Agricultural Connections Australia director Stephen Meerwald.

"The commercial implications of the China Australia protocol are the greatest limiting factor," Mr Meerwald said.

"China is a very complicated market, it is very difficult to see how it works and it is very difficult to get involved in and to understand it, but it is a huge market."

Federal Agriculture Minister Barnaby Joyce last week announced live exports to China would start off slowly probably via air transportation but could reach 1 million head per year in a decade.

Mr Joyce said the Chinese government had countersigned the highly anticipated Australian feeder and slaughter cattle import health protocol.

"My counterpart in China, Minister Zhi Shuping, has ratified the agreement for export of Australian slaughter and feeder cattle to China," he said.

"We expect import permits to filter through to Australian exporters, who are getting the groundwork in place, including establishing supply chains under the Exporter Supply Chain Assurance System (ESCAS).

"No exports can take place until ESCAS arrangements have been verified and approved by the Department of Agriculture to ensure Australia's world leading animal welfare standards are maintained.

"This is fantastic news for Australian exporters and while it will take time for significant numbers of cattle to be exported it is expected that air shipments of cattle will commence very soon.

"We will hope to build it to between a 20,000 and 40,000-head market in quick succession and over a decade we want to build this market to about 1m head a year.

"This is worth real money - about $1.5-2 billion dollars a year to Australia."

Mr Meerwald said the market was filled with challenges.

"There were headlines about China signing a live export protocol, and the publicity about the Chinese delegation that were here," Mr Meerwald said.

"They signed the health protocol here, but it didn't become official until they went back to China and their minister signed off on it.

"It's not realistic to think a 1m head trade would be possible.

"We get requests for boxed beef all the time to supply to this market, but when push comes to shove, they want low quality cuts and they have to be cheap."

Mr Meerwald said the protocols between Australia and China could add costs and complexity, and that Bluetongue disease was still an issue.

He said a "pre-export quarantine period" would differ depending on whether cattle came from a bluetongue zone in Australia, or going to a bluetongue zone in China.

"There are pre-export quarantine periods, oversight supervision by Chinese veterinarians, there are a range of conditions around how cattle are managed in quarantine and they will define where cattle will come from and where they can go to in China at various times, which is quite different for our other feeder and slaughter markets," he said.

"It also adds a cost burden that isn't current in place for the same cattle going to other markets."

Mr Meerwald said this was because the health protocol was built on similar requirements to the breeding cattle protocol.

He said that while extra costs may be justifiable for the breeding cattle trade, it was not the case for feeder and slaughter cattle.

"For feeder and slaughter cattle it is more difficult and expensive," he said.

"It is one thing to complicate export through the protocol and conditions, but its another thing to think they can do all the extra requirements and the price will be the same or less than other markets that are accepting cattle without those prohibitions."

Competition from the grey market was also complex for trade.

Mr Meerwald the volume of meat imported via the grey channel is estimated to be between 500,000 and 750,000 metric tonnes per annum.

"These figures put into perspective two things: that we have a growing trade into China, but at the moment we only represents a third, or maybe even a quarter of imports given the estimated illicit imports," he said.

"It goes to show the magnitude of the demand of the market, but it also emphasises the demand is for the lower price and quality product.

"It is not only a problem for price and competitiveness, but it also presents a risk to human health.

"It is easy to say we will shut down the grey trade, but from China's side it is a lot more difficult to shut it down.

"It is realistic to expect that our competitiveness will be continued to be challenged by meat imports through the grey channels.

"I suspect it will be a challenge for our industry for a long time.''

Mr Meerwald said while there are hurdles that need to be addressed he still believes trade will happen.

"It will happen a lot slower than it has been anticipated," he said.

"It will be more complex.

"The facts are very apparent, the price of beef over the past 15 years has grown, as well as consumption.

"Maybe in two to three year's time we will be seeing something completely different."

Page:
1
FarmWeekly

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 

COMMENTS

light grey arrow
I'm one of the people who want marijuana to be legalized, some city have been approved it but
light grey arrow
#blueysmegacarshowandcruise2019 10 years on Daniels Ute will be apart of another massive cause.
light grey arrow
Australia's live animal trade is nothing but a blood stained industry that suits those who