China: Beef prices have fallen to a five-year low
Recently, there has been an interesting trend in the Chinese beef market: prices have fallen to a five-year low. The country's authorities are encouraging farmers to increase domestic production while supporting imports. However, the cooling of the economy has led to an oversupply of meat, which has led to a decrease in local beef prices to levels not seen in the last five years.
Wholesale beef prices fell by 18% compared to last year's peak and amounted to about 62 yuan ($8.53) per kilogram. This has made most of the livestock industry unprofitable, which can create problems for the state budget.
The Ministry of Agriculture called on local authorities to support farmers with subsidies and feed to avoid a crisis.
The beef situation has also become a problem for the country's food security. The Chinese government is striving for self-sufficiency in key markets, including the beef market. In the face of deflationary pressures engulfing the economy, Beijing was forced to intervene and support various industries - from animal husbandry to crop production.
One of the problems was the increase in beef imports into the country. In the first five months of this year, beef imports to China increased by 23%. Beijing is actively opening up access to its market to other countries such as Brazil, Spain and Australia, which was recently added to the list. This can be called food diplomacy, which improves relations between countries.
Beef is a relatively expensive meat in China, its cost is almost three times the cost of pork. The demand for beef is growing along with the growth of the country's prosperity. However, currently, due to the deteriorating economic situation, the demand for beef is declining, which creates additional problems for producers and the Chinese government.
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