China looks set to remain as the biggest single contributory factor impacting global meat markets.
This is according to Livestock and Meat Commission (LMC) chief executive, Ian Stevenson.
“The current state of uncertainty within that market is being reflected on an international basis,” Stevenson explained.
“China is slowly responding to the decision to move away from a zero tolerance Covid-19 policy.
“The country’s economy is currently in a state of stasis. This is reflected in the fact that almost 30% of its 2023 university graduates cannot find employment.
“In addition, consumers across China are now putting a very strong focus on the paying back of debt.”
The LMC chief said that as as a consequence, beef and lamb retail prices have softened and that cheaper pork is also impacting negatively on the country’s red meat market.
“But currency is also coming into play within China’s beef and import scenario. Recent months have been marked by a weakening of the Chinese Yuan,” he added.
In theory, this should make China less attractive as an export destination.
The most recent figures confirm that beef and lamb imports into the country actually increased during the first months of 2023 by a factor of 8%. However, the actual value of these imports fell by 11%.
China and global meat markets
Australia and Brazil remain key suppliers of beef to the Chinese market.
Similar trends can be identified within China’s sheepmeat market.
The ending of Covid-19 restrictions has boosted consumption levels; sheepmeat is very much a driver of social occasion in China.
However, imports have risen by 33% over the first half of 2023, leading to a 20% fall in prices during the same period.
“We are also seeing signs of a grey market for beef resurfacing in China. This entails the likes of frozen buffalo meat from India coming into the country through Hong Kong,” Stevenson continued.
“In addition, steps taken to boost levels of indigenous food production in China are now bearing fruit. The end result is a lowering in demand for imported beef and lamb coming into the country.
“Widespread inflation is squeezing margins across international beef and lamb sectors. There will be difficulties in passing on costs to consumers during the current cost of living crisis,” he added.
According to the LMC, retail meat prices have probably peaked; consumer spending is under significant pressure.
The commission said that there has been some relief for farmers reently on the back of falling feed costs.
“But threatening socio-political developments taking place around the world add cost and complexity along the entire food chain,” Stevenson said.
“Chronic labour shortages in economies around the world is adding significantly to food production costs.”