MercoPress. South Atlantic News Agency

Mercosur leading role in China's increased beef imports

The United States Foreign Agricultural Service forecasts China's 2008 beef imports to increase nearly four-fold to 30.000 tons boosted by strong domestic demand and the Olympic Games peak next August and an overall domestic short supply.

The additional tonnage is expected to come from Mercosur countries (Brazil, Uruguay) given the satisfactory sanitary conditions and better prices. In 2007 China imported 8,000 tons of carcass weight equivalence. FAS adds that some imported beef will go to state strategic reserves and estimates beef offal imports in 2008 to remain at least at 12,000, the same level as the previous year. This includes both direct shipments and indirect shipments via Hong Kong. China has to import high-quality beef for high-end hotels and restaurants because domestic high quality beef production is very small. However FAS also indicated that imports are expected to shift sharply in favor of inexpensive beef from South America, which can be half the price of U.S. product. In 2007, China's average beef and veal import price was 4,663 US dollar per ton from the world, but only 2,309 per ton from Uruguay. The average price of beef offal imports was 1,465 US dollar per ton from the world, but only 1,195 per ton from Uruguay. According to the Chinese meat industry, the President of the Brazilian Confederation of Agriculture and Livestock (CNA) confirmed on December 18, 2007 that China and Brazil reached an agreement in November 2007. Under this arrangement, China will import boneless beef from four Brazilian States, Rio Grande de Sul, Santa Catarina, Acre, and Rondonia. Industry sources claimed that the first shipment has already been sent. With U.S. and Canadian beef absent from the Chinese market for five years because of BSE-related restrictions, Australia and New Zealand have dominated China's imports of both live cattle and beef supplies, accounting for almost 100% and 68% respectively via direct shipments in 2007. With many major suppliers blocked from the Chinese market, the Chinese are trying to find new trading partners to reduce prices particularly from South America which is free of BSE. FAS estimates that China's live cattle, frozen bovine embryos, and semen imports should move in the same direction.