China Initiates Investigation into Beef Imports Amid Domestic Glut
China’s Ministry of Commerce has announced it will commence an investigation into beef imports, following a surge in domestic supply that has led to a significant drop in local prices. This move comes amidst growing concerns from China’s cattle industry, which is struggling with a market oversupply.
Reuters reports that the investigation, which will examine fresh, chilled, frozen, and offal beef imports between January 1, 2022, and June 30, 2024, was requested by the China meat industry association and other livestock groups. Notably, China is the world’s largest beef importer and consumer.
Data from China’s customs authority shows total beef imports reached $14.2 billion in 2022, more than double the $8.2 billion recorded in 2019. Brazil accounted for 42% of those imports, followed by Argentina at 15% and Australia at 12%.
The China meat industry association has stated that most of the country’s cattle farms are currently operating at a loss. "The influx of imported beef has exacerbated the crisis," the association said in a state media report.
Beef prices have hit their lowest levels in five years, while live cattle prices have slumped to a decade-low. Average wholesale beef prices slumped 22% year-on-year to 59.82 yuan ($8.20) per kilogram by the end of December, according to the Ministry of Agriculture and Rural Affairs.
Marino Cid Aparicio, a beef producer and regional alliance representative, acknowledged the impact of China’s imports, saying, "Any reduction in import volumes affects us, especially given China’s role as our main buyer and the opening of new markets like Japan. However, we continue to supply premium products."
Between January and November 2023, China imported 2.6 million tons of beef products subject to the investigation, up from 1.66 million tons in 2019.
The investigation is expected to conclude in eight months but could be extended under certain circumstances. The Ministry of Commerce emphasized that it does not target specific countries or regions and will not disrupt normal trade during the probe.
However, once concluded, the investigation could potentially impact Argentina’s beef exports to China, which reached 709,100 metric tons worth approximately $2.76 billion in the first eleven months of 2023.
According to estimates by the Argentine Rural Society, beef exports are expected to reach $3.997 billion, with an increase of $444 million, while regional economies are projected to reach $11.152 billion, up $236 million. "These increases would help mitigate the impact of falling cereal and oilseed sectors," the group said.
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