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Highlights
- China's beef imports reach an all-time high amid slowing domestic demand.
- Shift toward affordable suppliers impacts traditional exporters like the US and Australia.
- Domestic production growth drives further pressure on beef prices.
China's beef import figures have set a new record, yet slowing domestic demand and falling prices have raised the risk of authorities imposing trade curbs to manage the market. In 2024, China imported a record 2.9 million tonnes of beef, a 5% increase from the previous year, according to newly released customs data.
Over the last five decades, beef consumption in China has surged nearly 40-fold, driven by increasing affluence and a growing appetite for popular dishes such as steak and hotpot. However, recent data from consultancy Mysteel highlights a shift, with consumption dropping last year as economic pressures led many cash-strapped consumers to cut back on discretionary spending, including higher-cost proteins like beef.
China has increasingly turned to more cost-effective beef imports as part of a strategy to strengthen trade relationships with key exporters like Brazil and Argentina. This shift has gradually replaced pricier imports from traditional suppliers such as the US and Australia. Companies in these countries, including Australian meat suppliers (ASX:AAC) and US agribusiness firms (NYSE:ADM), may feel the economic ripple effects of these trends.
Moreover, Beijing has been ramping up local beef production to ensure food security following disruptions caused by the pandemic, further decreasing dependency on foreign supply. This dual effort—promoting affordable imports and boosting domestic output—has led to significant price declines. Wholesale beef prices have fallen by about 20% over the past two years, according to Chinese government data.
The combination of record imports, price pressures, and shifting trade dynamics could lead authorities to consider interventions to regulate the market and avoid further disruptions. If such measures are enacted, it would likely influence both domestic producers and international suppliers.
With these developments, businesses involved in China's beef trade face a complex landscape. Companies reliant on exporting to the Chinese market must navigate the challenges of shifting preferences and increasing competition from domestic and cost-effective suppliers. On the other hand, local producers stand to benefit from the government's emphasis on self-sufficiency.
While China’s growing consumption of affordable proteins continues to reshape the global meat market, the long-term implications of potential trade policies and evolving economic factors remain key areas of focus.
