Rabobank senior animal proteins analyst Angus Gidley-Baird said Brazil’s move won’t necessarily spell disaster for Australia in China. BRAZIL’S big moves on the beef trade into China is not necessarily the tsunami for Australia it might at first appear but the key will be setting ourselves aside as a superior product.
Prominent agribusiness outfit Rabobank’s latest Beef Quarterly report, released yesterday, has Brazil dominating global beef trade this year courtesy of favourable currency rates, improved market access and greater supply.
The South American beef giant should become the leading beef exporter to China and its access to the US fresh beef market is also expected this year –two key markets for Australian beef.
However, report lead author Rabobank senior animal proteins analyst Angus Gidley-Baird said that won’t necessarily spell disaster for Australia in China – in fact sustaining supply in a market where demand is growing could be a good thing at a time when Australia has less volume to offer.Free Trade Agreements look like serving Australia well under the set of global beef trade circumstances shaping up for 2016.
While it’s hard to isolate and qualify the benefits of an FTA to the individual producer, Mr Gidley-Baird said the the beef industry had kicked some major goals recently –Korea in 2014 and Japan and China last year –that were now setting the scene for advantages in markets that Brazil was targeting.
In China, Australia has a two-per-cent lower tariff than other exporters, which will be removed at that rate annually until it hits zero in 2024.
“By 2025 we are predicting China will need an extra 2 million tonnes of beef and that will come mostly from Brazil and Australia,” Mr Gidley-Baird said.In January this year Brazil exported 8900t to China, against Australia’s 5317t.
Chinese import figures showed the per-unit import value of the Brazilian product was US$4.87, while Australia’s was $4.61.“That is a per unit value, so it will be influenced by what cuts are being sold and the markets they are going to, but what it shows is that the perception Brazilian product is a lot cheaper is not the case,” Mr Gidley-Baird said.
“Our tariff advantages will make a difference to Chinese buyers weighing up the two.”
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