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16

2022

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11

Australian Beef Exports Affected by Weak Demand in China

Source:

BTC

The pandemic and other factors have led to a slowdown in the consumption of beef and mutton in the Chinese market, which in turn has had a significant impact on Australian exports.

 

Many regions in China such as Shanghai, Tianjin, Zhengzhou, Chongqing, Guangzhou, and so on have been repeatedly affected by the Covid-19. In addition, the government has taken extremely strict prevention and response measures against the epidemic, hindering the circulation and consumption demand of beef products in the Chinese market to a certain extent. 

 

The pandemic and other factors have led to a slowdown in the consumption of beef and mutton in the Chinese market, which in turn has had a significant impact on Australian exports.

 

On the one hand, the price advantage in the Chinese market is gradually diminishing or even disappearing. Beef brisket, for example, has been in strong demand in China in recent years, leading to a premium of US $3-4 / kg compared with exports to Japan and South Korea, but that gap has almost disappeared.

 

Australian traders express that because there is no obvious price advantage in exporting to China and the demand from the Chinese market is decreasing, some have chosen to sell part of their products to Japan, South Korea, the United States and other markets.

 

On the other hand, the slowdown in consumption has led to a build-up of beef stocks in China. Beef exports from Brazil, Uruguay and other suppliers to China this year have considerable amounts, while the consumption in the Chinese market is insufficient, which leads to the current oversupply in the Chinese domestic market and the unbalanced supply and demand. Even if new demand is unleashed, it will take time to work through existing inventories and incoming new products. In addition to Australia, beef imports from Uruguay, Argentina, Brazil and other countries are also affected by the weak Chinese market to varying degrees mainly in beef prices, reduced transactions, live cattle prices and so on. INAC said the average price of Uruguayan beef exports fell by 11% in the week from October 30 to November 5 to $4,224 / ton, compared with $5,466 / ton in the same period last year. Nearly 30% above current levels. The Argentine industry has also expressed concerns about falling demand in the Chinese market.