AFRICAN swine fever ripped through China's pig herd in 2018, cracking the global meat trade wide open but with stock numbers moving towards a full recovery, the impacts on Australia's largest red meat export market are about to be realised.
China is Australia's largest sheepmeat export channel and most stable export beef trade, according to a recent Meat & Livestock market snapshot report, so despite early concern about rising pork consumption off the back of a production rise, market commentators have quashed fears of reduced trade into China.
In 2020, it was estimated that a decline in pork production within China created a 25-million tonne gap in available pork meat, providing a pretty big space for alternative proteins to become a preferred choice for Chinese consumers, as well as global.
Australia's beef and sheepmeat exports to Greater China for 2020-21 totalled 341,519t, valued at $3.1 billion, and Thomas Elder Markets analysist Matt Dalgleish said the market was expected to remain robust.
"It has been a long-term market for Australia - 40 per cent of sheepmeat exports go to China," he said.
ASF supercharged red meat production into China from across the globe and Mr Dalgleish said it would most likely not return to a "normalised" scenario even as the herd recovered.
"It is expected that the pork industry will not be back on its feet until the middle of decade," he said.
There has been a 20 per cent reduction by China importing Australian beef but, considering limited supply and cost, Mr Dalgleish said that was expected.
"There are still positives with trade into China in the coming years - especially once political tension reduces," he said.
Also attributing to continued stable red meat imports into China, was despite an increased herd size, production issues such as litter sizes would translate to lower pork volumes.
The Chinese herd is reportedly back to 420m head after losing about 200m pigs since 2018 but Australian Pork Limited's executive general manager - operations Peter Haydon said figures out of China were "notoriously rubbery".
"Lower pork prices would lead us to believe it but a variant of ASF is still spreading," he said.
"Production returning in China will decrease the total amount of trade in pork around the world - before ASF it was 8mt and in 2020 it reached 13mt."
Mr Haydon expected it to taper back to about 9mt with softened prices but there was divided opinion about whether or not Chinese consumers would retain a switch to red meat consumption instead of pork.
"Historically, China has a tendency to not change based on what is happening in a global context, everyone else changes around them," Mr Haydon said. "There will be a reduction in pork consumption going forward.
"Their population is growing and so is meat consumption. Even if pork consumption returns to its previous levels, consumption of red meat would remain high to match that growth."
Solid demand for Australian red meat keeps producers in an advantageous position and Livestock SA president Joe Keynes understood that China's support for sheep and lamb, as well as beef would continue.
"We know there are complications with many of our export abattoirs but China has remained a key market for Australian product," he said.
"Obviously, we need to focus on such a large market but it is important to be mindful of market diversity."
Mr Keynes said strengthening greater opportunities, outside of China, for Australian red meat was of great importance for the sector.
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Vanessa Binks
I am the Markets Editor and journalist at the Stock Journal. I am based at Nuriootpa in SA's lower north.
I am the Markets Editor and journalist at the Stock Journal. I am based at Nuriootpa in SA's lower north.
