Chinese beef surge

26 Aug, 2013 02:00 AM

CHINESE demand for WA boxed beef has increased significantly.

From January to May this year the value of boxed beef exports to China has grown 10 times compared to the same period last year.

The Chinese market now makes up seven per cent of the market share for boxed beef exported from WA and is valued at $2.5 million.

It is a situation which has been mirrored throughout Australia according to Department of Agriculture and Food (DAFWA) beef leader Brad McCormick.

Increasing demand for food from China is something which has been talked about continuously, and Mr McCormick said the figures were finally starting to confirm industry talk.

"This opportunity is not missed on the industry," he said.

"We have been expecting the rise of China and I think we are finally seeing the start of it."

While it was still early days, Mr McCormick said there had only been six months' worth of data to reflect the increase.

"It would be nice to see the trend continuing on for 12 months," he said.

"It is certainly a good indicator, but it would be very nice to be able to say that it is an ongoing thing rather than a flash in the pan."

He hoped the increasing demand would be incremental and unfold over time, signalling a more long-term change in the market.

"We have seen fast growth in export markets before and they fall over," Mr McCormick said.

"A steady incremental growth enables us to respond and get our ducks aligned."

While boxed beef exports to China offer enormous opportunities for WA beef producers, Mr McCormick said there were a number of challenges for the industry.

"China is one of those markets where you need accreditation for export," he said.

"Currently in WA only one beef processor has those accreditations in place.

"Clearly if we are going to continue to grow this market we would need to get more abattoirs accredited to export to China."

Australian beef exports were also tipped to continue to rise by National Australia Bank's latest Rural Commodities Wrap.

NAB was forecasting a solid demand from key emerging markets, which included China.

NAB Agribusiness general manager Khan Horne said beef exports to China had an unprecedented surge in late 2012 and had maintained a strong pace to be the largest positive contributor to growth in 2012/2013.

"Despite traditionally slow demand for beef in summer, we expect the strength in shipments to China to be maintained in the new term due to the underlying fundamentals of a rapidly rising middle class incorporating more protein into their diet, and a weaker Australian dollar favouring export competitiveness," Mr Horne said.

Mr McCormick said China also offered a number of opportunities in the live export industry.

While there was currently no protocol for exporting live cattle to China he understood there was work going on to get those protocols in place.

Australian Live Exporters Council chief executive officer Alison Penfold said work was being done to send live cattle into China, but it was still in its very early stages.

In the late 1990s, China and Australia signed a slaughter and feeder cattle protocol but Ms Penfold said it was not one that that would enable Australia to export cattle out of the north due to Blue Tongue sensitivities.

"We are doing work to facilitate other negotiations," she said.

"We are basically already exporting dairy heifers under a breeder protocol but we need to renew and rejig that feeder protocol to make it a viable trade."

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26/08/2013 4:53:39 AM, on Farm Weekly

Incremental growth with the China market is the way to go. It takes many years to get established there. And if there are "spikes" in demand, count them as good omens but don't bank on their being "normal."


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