By Anna Flávia Rochas on 7/10/2015
Chinese beef consumption increased strongly in recent years, and despite market slowdown expected in the coming decade, continued growth in demand and a willingness of consumers to pay more should create opportunities for global beef processors, according to a recently released Rabobank report.
“An additional 2.2 million [metric tons] will be needed by 2025, and imports will play an important role in filling in the supply gap,” Rabobank analysts wrote in a market report.
China’s beef market also demonstrates potential for value-added products, and Chinese companies will play an increasingly important role in the global beef market by making more outbound investments in the coming decade, per the report.
Beef consumption has been the fastest growing in China, in comparison with poultry and pork, which are traditional proteins in that country. China’s beef market has grown 4.8 percent from 1996 to 2014, while pork increased 3.5 percent and poultry 3.4 percent over the same period.
China’s beef consumption is still well below pork and poultry consumption, under 6 kilograms per capita, while pork and poultry consumption account for 40 kilograms and 13 kilograms per capita, respectively. Nevertheless, within the next decade, Rabobank estimates that the Chinese market will have an additional consumption of 2.2 million metric tons per year, taking the total demand to 10.2 million metric tons by 2025.
“Local production will likely meet 80 percent of demand, with the remaining 20 percent met by imports,” said Rabobank analysts. “The new dynamics in the consumer market will offer global beef companies — typically suppliers of bulk beef to China — opportunities to focus on value creation and branding.”
Beef prices in China have increased and are now more than four times higher than in 2000, while pork prices have doubled and poultry meat increased 1.8 times during the same period. “Given the faster growth of beef consumption, this reflects consumers’ higher tolerance for soaring beef prices versus other meats,” analysts wrote.
The strong demand for the product indicates that there is little room for beef price to drop, according to Rabobank, and a high possibility that beef prices will continue to rise periodically, driven by supply shortage.