China closing in on the USA for share of exports

China closing in on the USA for share of exports

Beef
FIGURE 1: Beef exports- seasonality Beef export volumes were slightly below average during May and June but the average monthly flows for the first half of 2019 are still nearly 3pc above the five-year average levels.

FIGURE 1: Beef exports- seasonality Beef export volumes were slightly below average during May and June but the average monthly flows for the first half of 2019 are still nearly 3pc above the five-year average levels.

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Australian beef exports began to ease in May and the lower than average volumes continued through to June writes Mecardo's Matt Dalgleish

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FOR the first time this season, Australian beef exports began to ease in May and the lower than average volumes continued through to June. Total monthly exports for June came in at 100,050 tonnes swt, a 5 per cent drop on the May figures. Nevertheless, the first four months of the year were strong (Figure 1).

From May to June, US imports of Australian beef declined 13.9pc and flows to Japan eased fractionally, coming in a mere 0.8pc softer. Australian beef exports to China from May to June dropped slightly too, down 1.6pc. However, compared to previous seasons, beef consignments to China are still posting remarkable levels each month.

For the January to June period, average monthly Australian beef exports to China are running nearly 91pc above the five-year trend. This is a clear signal that ongoing issues surrounding the Chinese pork sector are impacting upon alternative protein supply markets.

Solid demand for Australian beef product this season has stemmed from China and this is continuing to narrow the gap between the beef export market share of the USA and China. In April we reported that China was holding third place in market share of Australian beef at 19.6pc, with the USA coming in second position at 21.8pc. China is now closing in on capturing second spot, with a market share of 20.7pc to the USA's 21.5pc (Figure 2).

FIGURE 2: Australian beef exports - market share Demand for Australian beef from China has remained strong which has seen its market share of our exported beef increase to 20.7pc.

FIGURE 2: Australian beef exports - market share Demand for Australian beef from China has remained strong which has seen its market share of our exported beef increase to 20.7pc.

What does this mean?

The United Nations has expressed concerns that the African Swine Fever epidemic will continue to spread across China and begin to impact upon neighbouring Asian countries, signalling more stock losses are to come.

Potential loss estimates in the Chinese pork herd have been touted as high as 50-70pc in recent reports and it could take up to a decade for their herd to recover. This suggests that the elevated Chinese demand for Australian beef, amongst other protein alternatives, will remain for some time.

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