As China imports increasing volumes of beef, stricter quality regulations are needed, and a recent ban on some Australian beef processors should not be “over-interpreted,” industry representatives told the Global Times on Thursday [27 July 2017]. As imported beef takes up a rising share of China’s meat industry, some processors with few or no qualifications are rushing into the market and causing some chaos, Gao Guan, vice secretary-general of the China Meat Association, told the Global Times. “For instance, there are ways to smuggle beef into China, which should be further cracked down on. So it’s not unusual that the authorities keep a close eye on imported beef,” he said…Full Article: ECNS.cn July 2017

Key Points

  • In July 2017, China’s AQSIQ banned beef imports from six Australian processing facilities [located in New South Wales and Queensland, and include JBS Australia, Kilcoy Pastoral Company, and The Northern Co-operative Meat Company] owing to non-compliant labels. According to an Australian publication, the beef ban is a retaliatory measure against Australia’s Foreign Minister and her recent criticism of China’s South China Sea operations. During the same month, officials in in Nanjing, Jiangsu Province, destroyed 28 MTs (~USD 120,000) of frozen beef from Brazil over food safety concerns.
  • In 2016, according to a report published by chyxx.com, China’s beef consumption reached 7.74 million MTs (a 4% rise from 2015). At the same time, according to National Bureau of Statistics, China’s beef output totaled 7.17 million MTs (a 2.4% rise from 2015).
  • From 2015 to 2016, according to Meat and Livestock Australia (MLA), Australian beef exports to China declined 37% to 94,040 MTs. Though, from January to June 2017, Australian beef exports to China totaled 51,085 MTs, a 7% year-on-year increase.

ChinaAg Comments

  • In January 2024, China’s import tariffs for Australian beef (both chilled and frozen) will drop to zero.
  • On 20 June 2017, China’s AQSIQ granted import approval to US beef.
  • In March 2017, China and Australia signed an agreement lifting restrictions on beef imports. As a result of the agreement, all licensed Australian beef exporters can export chilled beef to the Chinese market. Previously, only 11 Australian suppliers could export chilled beef. In December 2016, Australia’s Treasurer approved the sale of S Kidman & Co Ltd (Kidman) to Gina Rinehart’s Hancock Prospecting (mining consortium) and Shanghai CRED Real Estate Stock (Shanghai municipal government). Australian Outback Beef (AOB), a joint venture between Australia’s Hancock Prospecting (67% control) and China’s Shanghai CRED (33% control), was projected to pay approximately US$295 million for S. Kidman and Co. It should be noted Shanghai Zenith, the Australian branch of Shanghai CRED Real Estate Stock, owns Mount Elizabeth Station (200,000 ha) and Yakka Munga Station (189,000), Western Australia.
  • In March 2016, Australia’s Foreign Investment Review Board (FIRB) approved the acquisition of Carlton Hill station by Kimberley Agricultural Investment (KAI). As a result of the purchase, KAI (aka Shanghai Zhongfu Group) may invest in a sugar/biofuel mill, cotton gin, cattle abattoir and grain grading facility near Kununurra, Western Australia.
  • In December 2015, China-Australia Free Trade Agreement (ChAFTA) came into force.
  • In October 2015, Delisi Food bought a 45% stake in Bindaree Beef Group, an Australian meat (e.g. beef) producer. The investment by Delisi Food, once approved by Australia’s Foreign Investment Review Board, will partly be used to develop upgrading Bindaree’s meat-processing plants in eastern Australia.
  • In July 2015, Tianma Bearing Group (SHE:002122) bought (via its Australia branch TBG Agri Holding Limited, founded in August 2014) the stations of Wollogorang and Wentworth, Northern Territory and Queensland. The company also owns the Western Australia cattle stations of Balfour Downs, Emu Downs and Wandanya, as well as Ferngrove Wines.
  • In June 2015, China and Australia signed a free trade agreement.

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