Millions in coffers after end to China meat trade war

The economic impact of China reinstating trade with five banned Australian meatworks will be felt almost immediately.

The reinstatement of trade with China for five Australian meatworks should almost immediately reintroduce “$400m to $500m” back into the economy via the agribusiness sector.

In a welcome relief to Australian beef, currently with an almost-record high number of cattle in the country, it was recently confirmed China had re-accredited five Queensland and NSW meatworks that were banned in 2020 amid heightened tensions with the former Australian government.

Beijing at the time said the reason for the ban was due to labelling irregularities.

A spokesperson for the Department of Agriculture, Fisheries and Forestry confirmed Australia’s beef and veal exports to China peaked at $2.8bn in 2019-20 and had fallen to $2.3bn in 2022-23, reflecting the loss of income from the meatworks as well as weaker Chinese economic conditions.

Australian Meat Industry Council chief executive officer Patrick Hutchinson said it “won’t take very long at all” for the affected meatworks to build their business back up again.

“It’s welcome news throughout the whole supply chain because China … represents 20 per cent of the $2bn-odd trade,” Mr Huthinson said.

“You can say, roughly, we’re expecting $400m to $500m in that trade.”

Mr Hutchinson, who as lead of the peak body for processors played a significant role in the ongoing discussions with the Chinese state about the meatworks, said they had “played a patient game”.

“It’s been a four-year process, we’ve had two Prime Ministers, three agriculture and trade minsters through that time. So I think we played a very patient game, but it all comes down to dialogue,” Mr Hutchinson said.

Australian Meat Industry Council chief executive officer Patrick Hutchinson. Picture: John Feder

“But, when it comes down to the relationship it became easier over time.”

Trade with China has improved since the Coalition government left office, with bans on the import of barley, wine, timber and hay and chaff all lifting before the meatworks.

Mr Hutchinson said the meat processors were “first in, last out”.

A DAFF spokesperson said since the lifting of various trade bans China had paid billions for Australian product, including barley ($1.8bn), wine ($16m), roundwood ($32.8m) and hay and chaff ($52.6m) to date.

There are still two meatworks which cannot trade with China due to a “residue issue”, which Mr Hutchinson and AMIC are currently working hard to resolve.

“That’s an alleged residue issue, and same as with the labelling issue, we’ve provided all the data they require so it’s up to them to review the data,” he said.

“And so hopefully they turn them from temporarily suspended to fully accredited again.”

One of the key issues for the domestic cattle industry after the reinstatement is to work away at the foothold American producers gained in China during the suspensions.

Meat and Livestock Australia general manager for international markets Andrew Cox said while the outcome was overall a positive, distortions in the market up and down the supply chain would continue for a time.

“The Chinese value certain beef imports and cuts over others, so if you suspend facilities it has a distortive effect, resulting in unmet opportunities,” Mr Cox said, speaking from Shanghai.

“(But we) can’t underestimate the confidence this brings, so if things are becoming more positive here (in China), and Chinese sentiment is better, it can only mean a good thing for Aussie farmers.”