U.S. beef sales to China may be bargaining chip, analyst says

Updated 2017-02-27 09:30:31 Global Times

Incoming ambassador expresses interest in increasing shipments to nation's huge market

If U.S. President Donald Trump launches a trade war against China, the country could retaliate starting with red meat imports from the U.S., which have been considered as a sector with high potential in recent years, an industry expert told the Global Times on Sunday.

The comment came after Iowa Governor Terry Branstad said that he will work to promote such sales after becoming the U.S. ambassador to China.

He made the comments at the U.S. Department of Agriculture (USDA) annual Agricultural Outlook Forum, Reuters reported on Thursday (U.S. time).

Branstad was chosen as ambassador by Trump.

"Mad cow disease is long since gone in (the U.S.), and there is no reason why the Chinese should continue to restrict American beef," Branstad was quoted as saying in the report.

With the Chinese customers' appetite for imported beef growing, countries such as the U.S., India and Brazil have been tapping into the market in recent years, Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant, told the Global Times on Sunday.

"The prices of imported beef are much lower than (that available from) breeding domestically, and this has become a profitable business for merchants," he said.

China lifted a decade-plus ban on some beef from the U.S. in September 2016, according to the Chinese Ministry of Agriculture and General Administration of Quality Supervision, Inspection and Quarantine, and the ban on bone-in and boneless beef from cattle under 30 months old from the U.S. was removed.

The nation halted beef imports from the U.S. in 2003 to prevent the spread of mad cow disease.

The greater China area including the Chinese mainland, Hong Kong, Macao and Taiwan was the top beef importer in the world in 2015, accounting for 25 percent of the total imports, according to the U.S. Meat Export Federation. Australia, India, Brazil and the U.S. were the top four sources, with shares of 19 percent, 17 percent, 17 percent and 13 percent of imported beef, respectively.

"Once China lowers the barriers for the U.S. to export more beef products to the country, it will definitely become a strong rival for countries like Australia and India," Ma noted.

In 2015 and 2016, beef exports from Australia to China totaled 129,478 tons worth 7.5 million, according to the website of the Australian government. China's demand for high-quality beef grows rapidly, driven by a growing middle class, the website showed.

Beef imports will continue to rise in the coming years, the analyst noted. "As a huge gap still exists between demand and supply in China, it is a huge market for the U.S.," he said.

The company welcomes imported beef products as allowed by authorities that are also reasonably priced, a PR representative of the Inner Mongolia Kerchin Cattle Industry Co told the Global Times on Sunday.

"We expect to expand more sales channels, not only domestically but also overseas," the representative said.

Total beef output in China was 6.62 million tons in 2014, but demand was 7.96 million tons, domestic food news site cnfood.cn reported, citing a report about beef imports and exports published in 2016 by consulting firm Meat International Group.

Although China opened up its market for U.S. beef products in September 2016, U.S. beef products were already being smuggled on a large scale into the Chinese mainland through Hong Kong and Vietnam, according to the report.

"If U.S. put more tariffs on some Chinese products, China's growing beef market could be a bargaining chip in any trade talks," Ma noted.

Trump claimed during the election campaign that he would impose punitive tariffs of up to 45 percent on Chinese-made goods. However, he has not taken any action yet.

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