China to Reach Deal to Import Live Cattle From Australia Soon
Just of winning their case of lowering tariffs for beef exports from their biggest buyer, Australia now plans on winning another major buyer for its beef industry by asking China to open up its market to live cattle sales. Amid the growing middle class in China who have an insatiable appetite for eating beef, but due to limited domestic stock beef imports are hitting record levels after jumping 40 percent last year.
Importing live cattle makes economic sense for China as abattoirs are running at 30 percent of their capacity and labor costs of just fifth of wages given in Australia. One of Australia’s biggest cattle rancher and a major beef exporter to countries such as South Korea, Japan and countries in Southeast Asia is setting their sights on expanding more in the Asian market.
Australia and China are now open to live cattle trading after seeing a deal in 1998 go sour because of regulatory issues. Last March Chinese officials visited Australia to hold discussions on a possible live cattle trade and with Australian Prime Minister Tony Abbott during his visiting to Beijing for free trade deals, which raised the hopes that finally live cattle trading is within reach.
Beef imports this year might reach 550,000 tons or up by 40 percent compared to last year, and the Organization for Economic Cooperation and Development is expecting that beef consumption will become one of the most consumed meat in China for the next eight years with an average 7 percent increase per year.