Australian exports of beef to China set for eightfold increase

Source:Reuters Published: 2013-3-5 23:18:01

Australian beef sales to China are set to surge more than eightfold this year, providing a boost for farmers who are struggling with tougher US competition in traditional markets such as Japan.

Chinese demand for beef is growing as the diet of wealthier consumers changes to include more protein. But production has lagged domestically, where pork tends to be more profitable, boosting the outlook for overseas beef suppliers.

China will become Australia's fourth largest beef export market in the year to June 30, 2013, with imports jumping to around 50,000 tons from about 6,000 tons the year before, data from government research group the Australian Bureau of Resource Economics and Sciences (ABARES) showed Tuesday.

Australian beef exports were already on the rise before a ban on imports from rival Brazil, and the longer-term demand outlook is encouraging, analysts said.

"In the last six months there has been a bigger jump in China's beef imports from Australia because China blocked beef imports from Brazil due to mad cow disease," said Jean Yves Chow, a senior livestock analyst at Dutch financial group Rabobank.

"China doesn't buy from the US because of the same issue as Brazil, so you don't have many options but to buy from Australia. At the same time China's demand continues to increase," Chow said.

China, the world's third largest beef producer, is likely to see output rise marginally to 5.58 million tons in 2013 from 5.54 million tons last year, according to the US Department of Agriculture.

While the spike in Chinese sales might at first appear a boon for Australian beef producers, enthusiasm is tempered by the loss of higher value exports to Japan.

 



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