China relaxes customs access for Aussie imported beef: Is it a sign of a thaw in relations?

Jon Condon, 13/02/2023

CHANGES to COVID restrictions in China have seen imported beef trade through Chinese Ports become a lot easier over the past month.

Both Australian exporters and Chinese importers have commented on the development, with customs inspection and clearance times dropping from as much as two months previously, to one to two weeks since mid-January.

The result has been that the Chinese are actively buying Australian beef again, which was “a big turnaround from the back half of last year,” one export contact said this morning.

During 2020, China introduced onerous COVID risk assessment testing on imported chilled and frozen beef, despite international scientific opinion suggesting that frozen meat presented no significant risk of transmission.

However a Reuters Beijing report on the weekend said China had abandoned COVID contamination tests for chilled and frozen food imports from January 8, which may have helped speed up port processing.

The customs wait-times got so long at one point in 2020 that some Australian exporters elected to avoid China altogether.

“There appears to have been a change to port wait times for Australian beef, which previously was exposed to longer wait times than product from Brazil, for example,” the export contact said.

“Even though high rates of testing was affecting speeds at all Chinese ports, Australia was clearly being targeted, in retaliation over earlier Australian criticism over Chinese policy,” he said.

Even some Chinese customers became wary about committing to Australian product, knowing there could be lengthy delays in clearance and delivery.

“Like a lot of things in China, there’s no clear statement that Australian beef will now be handled equal to other imported beef, but it seems to be happening,” another trade source said this morning.

“But whether this has happened as a result of Penny Wong’s recent visit is entirely up to conjecture.”

In a series of actions as Australia’s relationship with China deteriorated, China suspended eight beef and sheepmeat exporters from Queensland, NSW and Victoria, between May 2020 and September 2021, over labelling non-compliance, residue and COVID-related issues. None have been re-instated.

Australia shipped 158,000t of beef to China in 2022, a long way from the 300,000t in trade seen in 2019 before the plant suspensions started. One estimate suggested 50pc of Australia’s original China-approved processing capacity had been removed following the suspensions.

“People can draw whatever conclusions they want, but one hunch is that beef is easier for China to relax than some other commodities, because there’s no WTO challenge proceedings in place, as there is on barley and wine,” one trade source said.

“Because its individual processing plants rather than disputes with entire countries, it could be easier to re-admit Australian beef processors that are currently suspended. But that does not necessarily mean there is some imminent change,” he said.

In a parallel development, China last month announced a decision to allow four companies to resume coal imports from Australia following an unofficial ban on the trade since 2020.

Easing in beef processing plant suspensions?

One of Australia’s largest export beef traders told Beef Central there had been speculation recently about trade relations improving following Penny Wong’s earlier visit, and potential for Australia’s suspended processors to re-gain China access.

He said what was clear was that the rate of clearance at port in China had definitely ‘cleaned up’ over the past few weeks.

“Whether that is because the Chinese authorities have eased the restrictions that were happening, or are a result of recent Australian government visits, nobody can tell,” he said.

“But there’s no doubt that Australian beef was being targeted during that earlier phase.”

There were lots of rumours about, but nobody in the trade – either in China or in Australia – knew anything for sure, he said.

“We continue to talk with customers, but everyone is simply guessing at this stage. There’s often fire where there’s smoke, but there’s no guarantees.

“We’ve heard that every de-listed beef processor in the phone book is likely to regain access; we’ve variously heard there will be announcements about access changes this week; in March; and in May – take your pick.”

“It’s hard to really understand what’s going on – but having said that, the Chinese are actively buying Australian beef again, which is a big turnaround from the back half of last year,” the trader said.

He said a huge amount of extra meat (not only Australian, but also Brazilian, New Zealand and US) had to find a home in other markets during October, November and December last year when Chinese buying fell away sharply.

“It’s impossible for the biggest beef importer in the world to have a couple of months off, and not have an impact on global meat trade,” he said.

“China has come out of the Chinese New Year period quite positive, and it looks like trade is getting back to normal. There’s a big pipeline that’s going to need re-filling, and the US weekly slaughter has now started to decline, as the drought liquidation phase comes to an end. The US is only now starting to kill less cattle, down about 10,000 head, week-on-week, and we have not felt the impact of that yet, in markets like China.”

“But the positive thing, in a government-to-government sense, is that there is dialogue again. The Chinese would not even pick up the phone to the Sco Mo team. At least there is real progress being made politically – but whether that translates into better access for beef, is anybody’s guess – but it’s got to be better than where we were.”

MLA’s Andrew Cox said while China’s initial COVID wave this year may now have started to subside, it was likely to be a number of waves still to come, because of the low rate of vaccination and limited efficacy of Chinese vaccines.

“Chinese New Year celebrations only finished a week ago, and many see this event, when there are mass movements across the country to see relatives, as likely to trigger another wave,” he said.

“A lot of the Chinese population was not exposed to COVID until relatively recently.”





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