IN early January, China suspended a tenth Australian red meat processing facility which has left some producers confused about the state of play with what is a valuable export market.
Here, Stephen Martyn takes a holistic look at the issue and provides some of the historical context of beef exports to China.
Plant suspensions and product held up at port of entry can happen in any export market for any range of reasons and is one of the many variables that a meat exporter faces when trading in the internatIonal marketplace. Even when there is a free trade agreement in place, as there are with many of Australia's meat export markets, the essence of those agreements are largely trade related and the technical parameters of trading in a time and temperature-sensitive product like red meat are often a separate issue.
In most markets there are established standards for entry but also, most importantly, well understood and agreed processes for reviewing and rectifying any perceived compliance issues around those standards.
These systems in markets such as the US and Japan operate with consistency and allow exporters to trade with confidence.
The issue in China of recent times appears not so much that compliance issues may have occurred, but rather that there has not appeared to be any immediate process for their resolution.
Good faith
In 2014 the market for chilled beef in China had expanded so quickly that China's own cold chain had been unable to manage some aspects of the growth. Australia showed its good faith in the market by proposing a hiatus in the chilled trade to China until a more controlled process could be put in place.
This left China at the time as a frozen-only market.
A chilled beef trial began in 2015 when ten Australian beef plants, selected by China, began a six month trial. The investment by the Australian processing sector in meeting and exceeding the evolving requirements of the Chinese market over this period was substantial.
After a successful chilled trial (which ended up taking two years), the signing of a Joint Statement on meat during an official visit by China in 2017 provided a process that would allow, over time, access for chilled product from all Australian accredited plants as well as allowing new plants to be listed.
At the time this was a great outcome on non-tariff trade barriers and demonstrated a reset of the market from earlier years.
The work by all sectors of the Australian meat processing sector in developing the 'Chilled Meat Standard' with the government was at the basis of this "reset".
We currently, however, still have only eight plants accredited for chilled meat to China (seven beef, one sheep).
Despite being the first country to be given an official chilled trial back in 2015, that advantage has since dissipated with many other countries gaining access in the meantime.
In 2017 US beef was still banned in China because of BSE. It now appears to be a major benefactor from the Australian suspensions.
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Commerial pain
On the positive side there are still 47 Australian plants accredited for beef and sheepmeat to China and it still remains a very important meat export market taking 148,356 tonnes of beef in 2021, a similar level to the US. We also exported 62,881 tonnes of lamb over the same period to China and when you add the 57,343 tonnes of mutton, it was probably the largest single sheepmeat market for Australia globally in 2021.
The commercial pain of the current suspensions however is worn by those plants that don't have access - suspended or not listed - but still have to compete in the same livestock market as those that do.
A multi-plant operator has more flexibility and can shift production to plants that do have access but a smaller single plant operator, or one that has been waiting for listing for years, does not have that same flexibility.
On another positive note, a new global system developed by Chinese authorities that formalises their approach to food safety systems came into force on January 1 this year with Decrees 248 and 249. The new Chinese Government portal has allowed Australian authorities to register all accredited plants under the new system including those suspended and does provide a possible technical framework for resolving non compliance issues in the future.
The Australian Meat Industry Council has been calling for the relationship with Chinese authorities to be reset again so the potential that was so apparent in 2017, and that the industry worked so hard to achieve, can be rekindled to both countries' advantage.
Meanwhile, it remains just another challenge for a nimble and diversified processing sector seeking to address the many vagaries of the international marketplace while endeavouring to maximise returns in an ever changing world.
- Stephen Martyn is our new Over the Hooks columnist. He has more than 40 years experience in various aspects of the meat industry, including three years in the United States and four in the Middle East representing the Australian Meat and Livestock Corporation. He travelled widely for AMLC in north Asia and joined the Australian Meat Council in 1998. He was appointed National Director Processing at the Australian Meat Industry Council following the merger with the National Meat Association in 2003. Mr Martyn wrote a book on the history of meat processing in Australia in 2014 called World on a Plate. He retired from AMIC in 2017 and runs a part time consultancy.
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