gira meat club 2003 far east: beef marie-pierre boudet
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GIRA Meat Club 2003
Far East:
Beef
Marie-Pierre Boudet
GIRA Meat Club 2003
Continuous Rise in Imports
Imports ('000tcwe)
2002 2003 2004
Japan 719 869 900
S. Korea 374 382 401
Philippines 127 139 150
Taiwan 85 96 102
China 73 75 76
Exports ('000tcwe)
2002 2003 2004
India 369 413 463
China 22 19 19
GIRA Meat Club 2003
• Japan: Despite demand recovery and limited domestic beef supply, high international prices slow down the recovery in import volumes
• S. Korea: Imports were low this year due to the economic downturn, high export offer prices and high inventory levels
• China: Lower tariff in 2004 hence higher imports of high-end muscle meat and beef cuts (domestic production is inadequate)
• Philippines: expanding domestic meat processing industry, hence a rise in meat imports in both 2003 and 2004
• Taiwan: Imports will benefit from the Taiwan economic recovery this year and the next + reduction in tariffs
• India: Exports of buffalo meat are forecast to grow : increasing demand from traditional and emerging markets in both 2003 and 2004
Overall Market Growth
GIRA Meat Club 2003
Consumption Affected by High Prices, better outlook for 2004
3.0%4.0%
-0.3%
0.9%
0.4%
2.5%
3.2%
8.5%
1.7%2.9%
12.7%
6.1%
China (4.6kg): rising income continue to favour growth in beef consumption
India (2.4kg): high prices prevent any big consumption growth
Japan (10kg): fewer price promotions beef and cooler weather slowed down beef consumption recovery in 2003. High prices expected again next year
S. Korea (11kg): lower rise in 2003 for economic reasons and high beef prices. Elections and higher GDP growth in 2004
Philippines (5kg): relative poor economic conditions. Elections planned in 2004
Taiwan (4kg): increasing purchasing power in both years
GIRA Meat Club 2003
JP Consumption Recovery
First 8 m. Beef marketing quantities rose by 5.4% on last year level
August was hampered by the cool weather (lower barbequing)
High prices during the rest of the year prevents price promotions
Consumption is thus expected to increase only slightly this year (+0.4%)
Japan Monthly Beef Marketing Quantities 2001, 2002, 2003
40 000
50 000
60 000
70 000
80 000
90 000
100 000
110 000
Ja
Fe
b
Ma
r
Ap
r
Ma
y
Jun
e
July
Au
g
Se
pt
Oct
No
v
De
c
2001 2002 2003
(Tonnes pw)
Source: ALIC
+5.4%/2002
-12.4%/2001
Stronger recovery expected in 2004, +2.5% (providing weather is better)
GIRA Meat Club 2003
Retail Prices have been very High this Year
Imported Beef Loin Retail Prices (Tokyo Market)
2001, 2002, 2003
300
310
320
330
340
350
360
370
380
390
400
Ja
Feb
Mar
Apr
May
Jun
e
July
Aug
Sep
t
Oct
No
v
De
c
2001 2002 2003
(jpy/100g)
Source: ALIC
Domestic Beef Loin Retail Prices (Tokyo Market)
2001, 2002, 2003
700
720
740
760
780
800
820
840
860
880
900
Ja
Fe
b
Mar
Ap
r
Ma
y
Jun
e
July
Au
g
Se
pt
Oct
No
v
De
c
2001 2002 2003
(jpy/100g)
Source: ALIC
+7%
+2%
GIRA Meat Club 2003
Imported Products still more Affected than Domestic
Japan Monthly Marketing Quantities per Origin 2001, 2002, 2003
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00Ja
Ma
r
Ma
y
July
Se
pt
No
v
Ja
Ma
r
Ma
y
July
Se
pt
No
v
Ja
Ma
r
Ma
y
July
Domestic Imported
('000 tpw)
Source: ALIC
2001 2002 2003
+9% -10%
-2% / 2001
-31% +18%
-19% / 2001
GIRA Meat Club 2003
Recovery in Imports in 2003 (+20%)
Decrease in imports in 2002 as more promotions on domestic beef
Japan Monthly Beef Stock Levels 2001, 2002, 2003
70
80
90
100
110
120
130
140
Janu
ary
Feb
ruar
y
Mar
ch
Apr
il
May
June
July
Aug
Sep
t
Oct
Nov
Dec
2001 2002 2003
(t boneless)
Source: ALIC
Japan Monthly Beef Imports 2001, 2002, 2003
10000
20000
30000
40000
50000
60000
70000
80000
Ja
Fe
b
Ma
rch
Ap
r
Ma
y
Jun
e
July
Au
g
Se
pt
Oct
No
v
De
c
2001 2002 2003
(t boneless)
Source: ALIC
+23%
This year, the low stock levels make it necessary to import more, despite very high imported prices
Given the tight situation in Australia and the US, trade has been relatively slow during the end of the year (very high prices)
2004: high international prices are likely to slow the growth in imports (+3%)
GIRA Meat Club 2003
• Australia dominates the chilled sector (55%)
• The US dominates the frozen sector (48%)
• Australia has suffered from a strengthening of the Australian dollar and its tight supplies
• However, given soaring US prices, some users of US beef have shifted to lower quality Australian beef
• Similar situation expected for 2004
Tight Supplies in 2003 and 2004
Japan Beef Suppliers, 2001-2003*
46.148.0
2.4 3.4
46.5 47.3
2.13.9
45.8
48.9
3.22.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
USA Australia New Zealand Canada
2001
2002
2003*
(%)
* January-August
GIRA Meat Club 2003
Herd Contraction Stopped in S. Korea
Korea Cow Slaughtering, 2002-2003
0
5 000
10 000
15 000
20 000
25 000
30 000
Ja
Ma
rch
Ma
y
July
Se
pt
No
v
Ja
Ma
rch
Ma
y
July
Hanwoo female Dairy cattle female
Source: MAFF
(head/month)
-23%
-3%
KR Monthly Wholesale Prices2001, 2002, 2003
5000
6000
7000
8000
9000
10000
11000
12000
13000
Ja
Fe
b
Ma
rch
Ap
ril
Ma
y
Jun
e
July
Au
g
Se
pt
2001 2002 2003
(Won/kg)
Source: NACF
+4%
GIRA Meat Club 2003
KR Imports Suffered from High Prices in 2003
• Surge in imports in 2002 (full liberalisation): +78% ! • Early 2003: rise in imports again (high domestic prices,
appreciation of the won)• Starting in July higher import prices and slow down in
consumption (economic downturn)• Rise in inventories• But still interest for imported products, cheaper than
domestic• Strong rise in chilled imports (no restrictions any more)• 2.3% increase expected in 2003• 2004 should increase by 5% (economic recovery and
slight decrease in import prices along with Canada re-entry)
GIRA Meat Club 2003
Australian Continuous Loss of Shares
• US share keeps on growing (66% of imports in 2003)
• High prices and inadequate supplies of Australia
• Short ribs are the favourite product in S. Korea
• 2004 should see a stronger competition between high priced US beef and lower priced Australian beef
Imports of US beef by cut, 2002
short rib64%
Brisket6%
Chuck roll22%
Striploin6%
shin & shank1%
blade1%
Source: MAFFImports of Australia beef by cut, 2002
Short rib16%
Other16%
topside9%
Brisket9%
Blade13%
Rump4%
Chuck roll14%
Striploin7%
Shin&shank10%
Tenderloin2%
Source: MAFF
GIRA Meat Club 2003
Indian Buffalo Meat mostly destined to Muslim Countries
• The rise in exports have led to a rise in buffalo culling in 2003
• Exports of buffalo meat are forecast to grow to cater to the increasing demand from traditional and emerging markets in both 2003 and 2004 (Indian products are particularly cheap), +12% annually
• India exporters expect to send:– 30 to 50 000 tonnes to Saudi Arabia (once lifted the
ban)– Jordan, Kuwait and Lebanon have become a major
re-exporter of buffalo mat to Iraq– Egypt should re-open its market to Indian products
GIRA Meat Club 2003
Continuous Rise in Chinese Production
• China production is mostly made up of small holders with 2 to 3 cows
• China cattle industry is still faced with problems (genetics, expensive feed, unconsistent quality, lack of comprehensive veterinary system, under-developped abattoirs)
• However the government is keen on reducing imports and encourage exports, hence a new strategic plan
• In the mean-time there is:– Growth in overall beef demand (rising incomes)– A true beef industry quickly emerging (growing and fattening
operations)– Increase of large companies engaged in production and marketing,
with sales network– Growing demand for innovations– Rapidly growing food-service
GIRA Meat Club 2003
Chinese Beef Imports have been increasing Regularly
• Imports this year was negatively impacted by SARS and higher imported prices, hence a small increase overall (+1.8%)
• Lower tariffs will benefit imports in 2004 (from 45% in 2001 to 12% in 2004)
• But higher imported prices again might slow imports down (+2.2% overall)
• USA and Australia are the major China suppliers
• They have met the strong competition of Brazil in both 2003 and 2004
• Higher food safety than wet markets favours the rise in imports
• However these account for only 1% of consumption (75 000 tonnes including what comes through Hong Kong)
• But are expected to double by 2010