BEIJING / CHICAGO, Oct 1 (Reuters) – As Australian beef exports to China dwindle amid diplomatic tensions, demand for grain-fed American beef has skyrocketed, fueled by the appetites of a class growing Chinese average.
Fondue restaurants, Japanese barbecue chains and steakhouses, all expanding into the world’s second-largest economy, are replacing Australian beef with American meat. Several Australian suppliers were banned last year and other shipments are taking too long to clear customs.
Imports of beef from the United States increased to 83,000 tonnes in the first eight months of 2021, nine times the amount of the same period a year ago, according to Chinese customs data, and are expected to be worth more than ‘a billion dollars this year. Australia has also fallen behind the United States this year as the top exporter of grain-fed beef to China.
âThey don’t have a lot of other options when it comes to the well-marbled, grain-fed product,â said Joe Schuele, spokesperson for the US Meat Export Federation (USMEF). “This is the product that really stands out in China.”
The deterioration of relations between Beijing and Canberra has affected supplies from Australia. Five of its largest factories were suspended by Beijing last year for reasons such as poor labeling and contamination with a banned substance.
Although other factories are still allowed to ship to China, importers say they face long delays.
Beef imports from Australia in the first eight months fell to 96,000 tonnes, half of what they were in the same period last year, according to Chinese customs data.
“We were told it would take at least 85 days to clear customs,” said a Beijing-based importer who has six containers of frozen Australian beef stranded in the port of Shanghai and has started offering Tyson beef to its customers. of restaurants.
This compares to about a week for meat from other origins. China’s General Administration of Customs did not respond to a request for comment.
Sino-Australian relations have been strained since 2018 and worsened last year when Australia called for an independent investigation into the origins of the novel coronavirus, prompting trade retaliation from China.
A DEMAND FED IN GRAINS
Grass-fed beef, a high-end product in other markets, is typically routed to cheaper channels in China, such as mass-market restaurants and supermarkets.
Last year, imports accounted for 40% of China’s beef consumption, or about 2 million tonnes. Although supply is dominated by low-cost weed producers Brazil, Argentina and Uruguay, demand from mass market consumers is slowing in a weaker economy.
The mid-to-high-end Chinese market – where rules are fed on grain – continues to grow, however, as consumers “shop, eat better,” said Pan Chenjun, senior analyst at Rabobank.
China’s middle class spent $ 7.3 trillion in 2020, more than any other country, according to a report by U.S. research group Brookings, and continues to grow, with young people spending more than in other countries.
New York-based Wolfgang’s Steakhouse, which has two restaurants in Beijing, opened another in the southern city of Shenzhen this year and plans to open a fourth in Hangzhou.
The restaurant steals in chilled American beef before aging it. Its 800g rib-eye steaks cost $ 150 each.
âYoung people love meat, especially the 20-30 year olds who come here on dates,â said Glen Feng, Beijing outlet manager.
Even though China’s demand for beef has increased in recent years, driven by a growing middle class, the policy has reshuffled the country’s major importers.
Domestic production costs, meanwhile, make local supplies of grain-fed beef irregular, said Zhong Dingming, manager of Jingli fondue restaurant in Beijing. He said the imported beef like the Tyson (TSN.N) ribs he buys offers better quality for a slightly higher price.
In last year’s Phase 1 trade deal between Beijing and Washington, China agreed that US-approved processing plants could access its market without Chinese inspections.
The number of facilities allowed to ship to China has risen to more than 500.
TREX Corp, a U.S. meat exporter owned by Greater Omaha Packing Co, is purchasing meat from other packers to ship to China as demand increases, said Henry Davis, managing director of Greater Omaha.
In China, USMEF has doubled the number of training events teaching local chefs how to best cut and slice, said Joel Haggard, senior vice president for Asia-Pacific.
Shanghai-based retailer Swiss Butchery said it had sourced American beef as Australian supplies became less reliable. The store now sells US wagyu for 1,430 yuan ($ 221.87) per kilogram, sometimes selling 10 kilograms at a time, general manager Jaap Zuidervliet said.
American beef that meets China’s import standards is in short supply and the European Union is competing to buy the same meat, Davis said of Omaha.
And while Australian beef exporters have turned to Japan and South Korea, a well-established reputation means customers in China could quickly come back if things change.
âAustralian beef always has a reputation for being high quality and natural. In the long term, we are still very optimistic about China, âsaid Andrew Cox, managing director of international markets for the trade body Meat and Livestock Australia.
($ 1 = 6.4452 Chinese renminbi yuan)
Report by Dominique Patton in Beijing and Tom Polansek in Chicago. Editing by Gerry Doyle
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