Drought impacting China’s rising beef prices

Beef Central, 27/08/2013


Drought in parts of Central China is accentuating rising prices for beef and some other meat proteins.  

Chinese media reports suggest drought since mid-June has spread in central China's Hunan and neighbouring Guizhou and Hubei provinces, leaving more than one million people short of drinking water.

About four million hectares of agricultural land and 1.7 million head of livestock, including 860,000 cattle, have also been affected in Hunan Province, alone, according to government authorities. The extreme weather has also caused 186 rivers and 252 reservoirs to dry up.

Hunan province has sent 13,000 water tankers to irrigate croplands and provide water for 365,000 people, the government’s drought headquarters said. The drought is expected to continue as the province continues to experience high temperatures but little precipitation, according to the Government’s meteorological department.

Two of the key drivers for the strong demand for imported Australian red meat from China in recent months have reportedly been the stricter food safety management and a decline in domestic cattle and sheep numbers in China.

Latest Chinese red meat retail prices, released by the Ministry of Agriculture, indicated a continued shortage of red meat supplies.

MLA reported that Chinese boneless beef retail prices during July hit an all-time high, averaging RMB 59.38/kg (A$10.70/kg), with bone-in sheepmeat prices registering the second highest prices, at RMB 61.87/kg (A$11.20). Chicken carcase and boneless pork prices continued to rise for the second consecutive month, at RMB 16.85/kg (A$3.05) and RMB 23.75/kg (A$4.30), respectively.

To put the price rises into some context, beef prices in June (RMB 58.86) were 32 percent higher than the same time last year. Sheepmeat was 22pc higher, while pork and chicken were also marginally higher. The rise in price for beef appears to have triggered some liquidation of the domestic cattle herd, as livestock owners to cash in on the buoyant market for beef.   

Accentuating the rising retail price rises has been the country’s drought event. The Chinese Government reportedly has allocated 1.65 billion Yuan, in an aim to provide support for producers impacted by the drought.

For the fiscal year ended June 30, China took 92,300 tonnes of Australian beef, compared with just 7700t for the previous 12-month period. That’s a breathtaking 1098pc increase in volume – a rate of growth unprecedented in Australia’s export history in any ‘major’ beef export market.





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