New Zealand beefs up its presence in China
Agricultural banking specialist Rabobank says Chinese beef consumption is expected to continue growing at a faster pace than domestic production, increasing the reliance on imports to satisfy demand.
However, report co-author, Rabobank animal proteins analyst Matt Costello, warns that while the New Zealand beef industry sees long-term growth and potential within the Chinese market, so too do competitors from around the world.
“Currently both New Zealand and Australia have a significant head start due to direct trade and market access which gives them the opportunity to establish and cement long-term strategic partnerships along the supply chain,” he says.
Chinese beef consumption has grown at a steady pace, and although it remains low in comparison to pork and poultry consumption, it has begun to outpace local production, setting the stage for an increase in beef imports.
Costello says beef exporters across the globe are now looking to China in an attempt to understand whether this demand surge will plateau or if the need for beef imports will continue to grow.
“Chinese producers and processors are also aware of the looming structural deficit in the beef sector and are adopting different strategies to secure supply amid an environment of f lattening global production,” he says.
“The rapid growth of the quick service restaurant (QSR) sector in China is providing an efficient channel for increasing beef consumption among the young and wealthy.” More than 60 per cent of beef consumption in China occurs outside the home – a stark contrast to the consumption channels of both pork and poultry.
“Beef is not a staple meat in China and is considered a special item – this cultural mentality has resulted in beef being a niche product, making up eight per cent of per capita meat consumption, compared to
The rapid growth of the quick service restaurant sector in China is providing an efficient channel for increasing beef consumption among the young and
22 per cent for poultry and 65 per cent for pork,” says Costello.
The Chinese middle class continues to grow at the staggering pace of 27 million people per year and is currently sitting a 300 million.
“Encouragingly, this income group had the second highest rate of growth for beef purchases at 26 per cent between 1998 to 2011, and by 2010 they will represent 48 per cent of China’s population,” Costello says.
China shifted to a net importer of beef in 2010 and imports have continued to rise, tripling in volume from 20,135 tonnes shipped weight (swt) in 2011 to more than 60,000 tonnes swt in 2012, further increasing to 124,000 tonnes swt in the first half of 2013.