SA must make the best of exporting beef to China

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Agbiz Morning Market Viewpoint on Agri-Commodities: 05 April 2017  
April 5, 2017

SA must make the best of exporting beef to China

The announcement made on February 24, 2017, that South Africa and China signed a memorandum of understanding, allowing South African beef to be exported to China, could not have come at a better time for South Africa’s beef industry.

The news comes at the fall of a dreadful drought in 2016.

Furthermore, the recent increase in beef prices in December 2016 shows that the worst could be over for the industry, and the exposure into a market of China’s magnitude is another positive boost.

The declaration in 2014, by the International Animal Health Organisation that South Africa is foot and mouth disease free has played an integral role in increasing South African exports into more lucrative markets such as Vietnam, the United Arab Emirates and countries in Africa.

In 2015, the production of beef amounted to approximately 740000 tons, from 3 million slaughtered cattle, of which 25000 tons was exported at the value of $28m.

 

Understanding the Chinese Market

Chinese consumers are currently demanding products that are associated with what Jeffrey Towson, a professor of investment at Peking University, has termed as “premiumisation”.

The growing middle class and the desire for exclusivity have driven the growth in demand for exported meat.
Marketing the product according to the wants of the Chinese is a strong determining factor in how South African beef performs in China. The beef industry must use government entities such as Brand South Africa and South African Airways to promote their products, as that will provide credibility.

 

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