China’s appetite for beef is breaking records this year and according to analysts, the next big item on its shopping list will be coal.
In July, China imported 274,000 tonnes of beef from around the world, valued at a record $2.65 billion ($US1.8 billion).
Global Agritrends president Brett Stuart said the beef charts for China looked like a plane taking off.
“What’s shocking is when you look at the average import price in July, it was the highest price ever,” he said.
“So not only did China buy a record amount of beef, they paid a record price per pound on their import price.”
Mr Stuart said China was sourcing most of its beef from the South American nations of Brazil, Argentina and Uruguay, but its surging demand was affecting all nations.
“I forecast that in 2023 China and Hong Kong will be the number one market for US beef and I think it will be the number one market for the rest of my life. I don’t think we’ll see another country come close,” he said.
“Citizens of China are just clamouring for beef, it’s almost like cell phones or cars, everyone wants beef.”
Australia in the boxed beef seat
China is Australia’s third-largest export market for beef in 2022 and despite several abattoirs still being banned from exporting there, Australia has so far exported 85,000 tonnes, which is up 1 per cent year on year.
Mr Stuart said Australia was in an enviable position as global demand for beef increased.
“All over the world, global cattle supplies are tight, but Australia is in year two of a massive herd rebuild,” he said.
“The Chinese demand will make Japan bid more, it will make Korea bid more, and the only country set up to increase its beef output is Australia.”
Beef and coal
Mr Stuart said another boon on the horizon for Australia was demand for coal.
“Winter power shortages loom large in China,” he said.
“Already they’ve been turning off the lights in downtown Shanghai at night. They’re turning off factories because of the energy crisis.”
Mr Stuart said one of the main problems was the drought in China, which had reduced the nation’s hydro-electricity output.
Resource analyst David Lennox agreed.
“There are rumours now that China is starting to look towards increasing its coal imports, primarily because they are having significant trouble with their hydro-power,” he said.
“There’s about 1,100 coal-fired power stations in China, so even if they started up a few of those or increased their capacity, we’d see significant uplift for thermal coal going into China.”
Mr Lennox said the coal price had already climbed to historic highs this year, due mainly to the conflict in Ukraine, which was causing a gas crisis and pushing Europe’s demand for more coal.
“For Australia we’ve seen a real boom in the value of our coal getting exported,” he said.
“At the start of the year I never would have said the coal price would go over $US400 a tonne … but one would suggest that price is perhaps one we’ll have to get used to for some time to come.”