Demand for Australian meat strong in China

Australian beef and sheepmeat will see continued demand in China despite the country’s slowing economy and COVID-related lockdowns impacting the consumption of meats, according to Rabobank research.

Speaking on a podcast, Rabobank’s Hong Kong-based senior animal protein analyst Chenjun Pan said that people in China had changed what and where they ate during the pandemic. Consumers began to eat more food at home, including that of the ready-to-eat variety, but are eating less often at restaurants.

Importantly, the market for meat in the country has remained stable, even though its products are expensive and one avenue of their consumption has been neutered.

“Presently beef and sheepmeat retail prices are relatively stable — sitting at historically high levels. When compared with the international market, Chinese beef and sheepmeat retail prices are still very high,” Pan said.

“These high prices, despite a slowing Chinese economy, reflect that the consumption of animal proteins, particularly beef, is quite resilient.”

Australia’s exports to the country have reduced a fair bit in the last couple of years, which is unfortunate given that Australia relies quite heavily on China as an export market.

However, ultimately Australian meat has remained relatively steady, even though conditions are changing, said Rabobank senior animal protein analyst Angus Gidley-Baird.

“For the first six months of this year, Australian lamb exports to China dropped by 30% compared to last year,” he said, while Australian mutton exports to China increased 11% in the same time.

The decrease in Australian lamb exports to China, and the corresponding increase in mutton exports, was related to the reduction in use of restaurants by consumers.

“Lamb imports mainly go towards the foodservice sector, particularly high-end foodservice, such as premium hot-pot restaurant chains, while mutton, as a lower-priced protein, is consumed by the mass market in traditional sheepmeat-consuming regions of the country, particularly in northern China,” Pan said.

“We’ve seen the lockdowns really impact lamb consumption, but mutton consumption has been protected as it has a little bit of a wider market, including foodservice and retail.”

The analysts said that beef exports should remain stable for the moment, with the reduced level of exports into China reflective of low production volumes in Australia, not export potential.

Image caption: Angus Gidley-Baird and Chenjun Pan.