BEIJING: China’s beef and broiler meat imports are projected to rise 11% and 7%, respectively, in 2018, according to the latest “Livestock & Poultry: World Markets & Trade” report from the U.S. Department of Agriculture’s Foreign Agricultural Service. However, despite robust Chinese demand, coupled with stagnant or declining domestic production, the report said the opportunity for importing both beef and broiler meat from the U.S. is limited due to restrictions. On the broiler side, the U.S. is currently not eligible to export broiler meat to China due to highly pathogenic avian influenza (HPAI) restrictions, the report explained.
China’s domestic production is forecasted to fall 5% to 11 million tons for 2018. This follows declines in 2017 and 2016 of 6% and 8%, respectively, due to recurring HPAI outbreaks. “The impact on producers has varied,” USDA agricultural economist Tyler Cozzens said. “Some report only minor impacts due to improved biosecurity, while others have incurred higher losses due to depopulation, closures of traditional wet markets and soft consumer demand.” China’s 2018 imports are projected to be up — for the fifth consecutive year — to a record 480,000 tons, a 7% increase from 2017.
According to Cozzens, the U.S. was, until 2009, the primary supplier of broiler meat, with nearly a 75% market share. However, China’s imposition of antidumping and countervailing duties in 2010 and HPAI restrictions in 2014-15 constrained – and then shut off – U.S. shipments, allowing Brazil to capture the top spot as China’s main supplier in 2010 with less than a 40% market share. “By 2016, its market share had more than doubled to nearly 90% and is expected to continue to dominate as HPAI-related restrictions limit shipments from other major supplies,” Cozzens explained. On the beef side, the U.S. regained access to China’s beef market in May after 13 years, but USDA said market requirements will initially limit the ability of the U.S. to capitalize on trade opportunities. “China is the world’s second- and seventh-largest beef and broiler meat importer, respectively, accounting for 13% and 5% of forecast trade,” USDA said.
In the past 13 years since the U.S. lost access due to bovine spongiform encephalopathy, China has gone from an insignificant buyer to the world’s second-largest importer, but the country’s beef industry has been unable to boost production at the pace necessary to meet rising demand. As such, beef imports have grown sharply since 2013, reaching 820,000 tons ($2.6 billion) in 2016. USDA reported that from 2011 to 2016, China’s domestic beef production grew 8% to 7.0 million tons (carcass weight equivalent) but was outpaced by even stronger consumption growth, which rose 20% to 7.8 million tons during the same period. “China’s production is constrained by high costs, inadequate cold chain infrastructure, lack of investment and a fragmented industry of mostly small-scale producers located inland, which is challenged to service primary consumption centers in eastern China,” USDA agricultural economist Ryan Bedford said. “Unable to fully satisfy demand with domestic production, the country has increasingly looked to the international market.”