Meat sales boom in China

21 Apr, 2014 02:00 AM
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For Australian lamb and sheepmeat products China is the number one destination for exports.

SHEEPMEAT and beef sales boomed in China in 2013 with mutton rising 254 per cent to 57,888 tonnes.

Despite an estimated one million tonnes of meat being smuggled across the Chinese border, and strong competition from New Zealand, Australian produce was in high demand with red meat exports totalling 256,993t - 17pc of Australia's total exports.

Meat and Livestock Australia China manager Joy Tang, who spoke to woolgrowers recently as part of the 2014 Elders China Wool Tour, said last year Australian sheepmeat exports rose 34pc for lamb at 39,535t.

And volumes continued to rise this year with mutton sales up 25pc for January and February, and lamb down slightly by 1pc.

"Last year beef and sheepmeat sales were all very strong," she said.

"Last year we increased by three times the total volume of beef exported to China from Australia.

"China is now the third largest export destination for beef from Australia, behind Japan and the United States.

"For Australian lamb and sheepmeat products China is the number one destination for exports."

Ms Tang said Australian beef had the largest Chinese market share, at 45pc market share, followed by Uruguay and New Zealand.

But thanks to a free trade agreement, NZ had the largest market share in sheepmeat with more than 54pc, Australia was close behind at about 45pc.

"Australia is the second largest supplier to this market," she said.

"If you look at the data most of the products exported to China are breast and flap for the hotpot market (a popular traditional Chinese dish)."

Last year sheepmeat carcase exports also increased.

Lamb shoulders and necks also grew in sales, both cuts also being sold for the hotpot market.

"At the moment in China for sheepmeat products are mainly consumed in hotpots or lamb kebabs," Ms Tang said.

"The big season for hotpots is in winter, with more kebabs sold in summer for barbecues."

Ms Tang said decreasing local beef and sheep supplies had helped drive the huge jump in Australian sales.

"There are huge opportunities for imported products because of this falling domestic production," she said.

"A typical example is Chinese consumers like shin shanks, and no matter how much we produce domestically it is not enough for this big growing market, but if we talk to the importers that sell Australian products, Australian products cost 35RMB a kilogram while Chinese shin shanks cost 40RMB/kg.

"So we have demand and a price advantage."

Ms Tang said market access had allowed Australia good market success, with countries such as Brazil and the United States blocked from selling beef in China

"For beef we do not have many competitors in the market," she said.

"However smuggled product remains a problem.

"We don't have exact data but news sources and rumours in the market predicted this smuggled product reached up to one million tonnes last year, which is a lot."

NZ's free trade agreement meant it had "almost" a 9pc pricepoint advantage over Australian produce.

"This is why they have the largest market share in China," Ms Tang said.

The fluctuation of the Australian dollar had also posed a problem for all commodity items, including export beef and sheepmeat sales.

"But this is still not enough to stop sales," Ms Tang said.

"There is more demand than we can fill and because of drought in some areas of Australia this has decreased supplies further."

Another challenge in the Chinese market was the ban on chilled meat.

"It's not just Australia, every country that exports meat to China must ship it as frozen meat, but we are working on that to get a result," Ms Tang said.

"There are many reasons behind the ban, we think one maybe that chilled product really challenged local produce.

"If you go to the supermarket local people are used to the fresh killed, chilled product, but if imported products are also chilled this also has the potential to really impact the local industry.

"We are working at local government and also consumer levels to try and resolve this, but in a low-key way.

"We don't want to be seen as a threat to local markets."

There had also been several sheepmeat scandals, with unscrupulous vendors selling rat meat instead of sheepmeat.

"A lot of people were jailed because they used rat meat as an ingredient instead of sheepmeat," Ms Tang said.

"A lot of people were put in jail and that did affect exports."

Speaking before Prime Minister Tony Abbott visited China, Ms Tang said if a FTA was put in place between Australia and NZ it would mean the two countries were on an equal footing for sheepmeat sales.

But whether this happened was yet to be seen.

Miranda Kenny travelled to China courtesy of Elders as part of the 2014 Elders China Wool Tour.

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Miranda Kenny

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READER COMMENTS

wtf
21/04/2014 10:01:57 AM

Does anyone know what land purchase agreements the kiwis did with china on their fta? Maybe we can learn something
wtf
21/04/2014 11:57:56 AM

If time allows can a journalist track down a report into the effectiveness of free trade agreements? Roger Montgomery a financial advisor refferred to it the other day saying it showed no net gain. We would love to hear if that be the case so we can save overseas junkets

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