International

Beef trade disruption in Asia and Europe predicted by Rabobank

Beef

Lower pork production in China and a hard Brexit will have effects in the volume of trade in these regions.

Posted on Mar 05 ,13:08

Beef trade disruption in Asia and Europe predicted by Rabobank

The multiple ASF outbreaks recorded in China have led to tighter border controls in this country, which in turn have generated a sharp decline in the volume of trade through unofficial channels in Q4 2018. The increased Chinese border enforcement has slowed unofficial bovine trade from Hong Kong and Vietnam, says Angus Gidley-Baird, Senior Analyst - Animal Protein at Rabobank.
In the last quarter of 2018, Vietnamese imports of Indian carabeef have dropped by 60% compared to the same quarter from the previous year pushing down the prices of meat.
Nevertheless, China is to hard hit by the ASF and the effects are expected to be seen in the following months. "Despite pork consumption dropping, we estimate that production drops will be deeper, leaving a supply gap of some 1m to 2m tonnes for 2019. This will be partially filled by other meats, including poultry, beef, sheepmeat, and seafood. Due to the size of the pork market in China, additional imports and meat substitution cannot make up for the decline in pork production, and we expect all meat prices to rise in Q2 of 2019,", explained the analyst.
Meantime, in Europe, a hard Brexit is expected to create a significant disruption in the beef market, as the UK is a big importer of beef from the EU-27. Rabobank’s view is that UK beef imports will change little, if at all, during 2019. However, a hard Brexit will bring changes over time as beef exporters compete to access the relatively high-value UK market, with intra-EU trade flows potentially disrupted as a result.

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