Australia’s beef imports to China reach trigger limit

Australia might have a free trade agreement with China, but a safeguard trigger could mean a hiatus in beef exports.

Australian beef producers and processors could see a six-week lull in prices after exports to China exceeded the safeguard trigger level in September.

Tariffs on Australian beef into China, which historically ranged from 12-25 per cent, stopped on January 1 last year under the China-Australia Free Trade Agrement.

But Department of Foreign Affairs and Trade said China “retained the right to apply a discretionary safeguard on beef, not including offal, if imports (from Australia) exceed a set annual ‘safeguard’ trigger volume”.

That trigger volume started in 2017 at 170,000 tonnes, which was 10 per cent above

Australia’s long-term peak export figure, and increases over time, coming in at 178,418 tonnes this year.

To date this year, China is Australia’s fourth biggest customer, behind the United States, Japan and South Korea.

Beef exports to China have reached a safeguard trigger, built into the China Australia Free Trade Agrement.

Episode 3 market analyst Matt Dalgleish said the trigger was also reached last year, but in October, not September.

“We saw a 17 per cent drop in (2023) beef export volumes (to China) last November,” Mr Dalgleish said.

“But December rebounded as the shipments in that month usually go into the following year’s quota.

“So this year, it’s likely to only impact the next six weeks of trade as December flows will go into next year’s numbers.”

Meat and Livestock Australia global market analyst Tim Jackson said exports to China declined 15 per cent in September to 16,161 tonnes.

“Despite the decline year-on-year, Australian exports remain well above long-term averages, and exports have now reached the tariff quota limit under ChAFTA,” Mr Jackson said.

United States-based analyst Steiner Consulting Group said Brazil remained a major supplier of beef to China and imports were expected to lift in September and October after falling in August.

It said China imported 111,000 tonnes of beef from Brazil in August, or 48 per cent of the total it took, and were 14 per cent higher than last year for the period January-August.

Beef into China from Brazil, Argentina and Uruguay attracts tariffs of between 12-25 per cent, with the highest tariff on frozen product.

According to the MLA, beef consumption in China is expected to lift to 8.4 kilograms per capita by 2027, up from 6.4 kilograms in 2018.

MLA said China was the second biggest beef market in the world behind the United States, and consumed 11 million tonnes of beef last year.