In spite of a slower economy, China will keep playing an important role in global beef market in 2016. According to Rabobank, although the grey channel has made the market volatile, the massive market will continue to offer sustainable opportunities for the rest of the world.
In the first half of 2015, only six countries were allowed to export beef to China, i.e. Australia, Uruguay, Argentina, New Zealand, Canada and Costa Rica. By the end of 2015, Brazil Hungary and Chile had been added to the list of approved suppliers. Market shares by country of origin will look considerably different by the end of 2016 with Brazil likely to edge out Australia as the principal supplier. Additional countries and a reactivation of the grey channel in the latter months of 2015 led to oversupply and a weakening of prices. However this situation is somewhat temporary and the market is expected to improve on returns in 2016 but unlikely to return to the record levels achieved in 2014.
Based on the statistics from China Customs in 2015, 467,143 tonnes of frozen beef were exported directly to China with Australia remaining the largest exporter, as the volume reached 149,245 which accounted for 32% of the total import volume. Uruguay was the second largest player, the export volume of which reached 123,205 tonnes. With a weaker economy forecast for 2016, it is estimated that Chinese beef imports will be influenced by price.