INTERVIEW: Australia's beef exports to China poised for growth amid market shifts

China's demand for Australian beef is projected to reach 260,000 metric tons in 2025, with Australia being the major supplier of grain-fed beef to the country, Murray Davis, regional manager of Meat and Livestock Australia for Greater China, told Platts, part of S&P Global Energy, in an interview Oct. 10.

China's annual beef consumption stands at around 10 million mt, with about 3 million mt sourced from imports. "Australian beef accounts for roughly 8% of the import market, primarily targeting tier-one consumers," Murray said, adding, Australian beef products do not compete directly with local Chinese beef and have minimal impact on local farmers.

The current trade disputes between the US and China have severely affected the availability of US beef in the Chinese market. Murray said US beef is currently unavailable in the market, citing the expiration of licenses for a significant number of US plants. Previously, US beef held an 8% market share, but now, premium beef options are primarily sourced from Australia, he added.

Australia's free trade agreement with China allows for the export of 190,985.8 mt of beef by 2025, featuring a 0% tariff for in-quota volumes and a 12% tariff for out-of-quota volumes, according to China's General Administration of Customs. In 2025, the triggering of the 12% tariff after the import quota had been reached in July was unprecedented. Despite a month-over-month drop in Australian beef exports to China in September, Murray said the current volume is sufficient to meet demand, although the consumer market appears weak.

When asked about the expected volume for China's imported beef in 2025, Murray said it could probably be close to a record year, as August and September data were still strong. Unless something catastrophic happens in the last two months, the volume is most likely to reach 260,000 mt, according to Murray.

Murray also addressed the ongoing safeguard investigation into beef imports initiated by the Chinese government, which he said was prompted by the struggles of local farmers facing the influx of imported beef. The cattle herd in China are in small size, about 50 head, while some are less than 10 or 5 head, he added.

China's Ministry of Commerce is currently assessing data to determine the impact of imported beef on the local cattle industry, with potential outcomes, including import quotas, global tariffs, or even a complete ban on beef imports. The investigation has been extended to November, with the possibility of further delays.

Murray highlighted a shift in China's food service sector, particularly within hotpot restaurants, which are diversifying their offerings by incorporating different spices and focusing on more affordable cuts of meat. Demand from the hotpot sector is diversifying to cheaper cuts, hence, demand for oyster blade, shin, shank and chucks is rising, he added.

Regarding the forecasted lower slaughter rates in Brazil and Australia, Murray said Australian beef does not compete directly with Brazilian beef in the Chinese market due to differences in grading systems and quality standards. The Australian cattle herd is quite large currently, approximately 30 million head, and the country is able to produce more animals, he added.

Australian chilled beef to China is of interest as the exporters see that this demand has less competition from South America due to the distance between the two regions. However, Murray cautioned that exporters must first be registered as approved chilled meat exporters, a separate process from frozen meat registration.

Currently, China is not approving new registrations due to the safeguarding mechanisms and geopolitical factors, he said. Although, Meat and Livestock Australia as well as exporters are pushing for the registrations, according to Murray. Nonetheless, China allowed some registrations to go through for lamb exporters, he added.