China’s beef demand is to grow by 2.2m tonnes by 2025 according to Rabobank, which says that Chinese investors will play an influential role in the global beef market over the next decade.
Rabobank says that driven by the weak domestic production, but with strong demand, the beef sector will likely become the first agricultural sector where China has high integration with the rest of the world.
Chinese investors are expected to play an influential role in the global beef market, it says.
In addition to the volume gap, Rabobank says that China’s beef market also demonstrates potential for value-added and branded beef products.
Strong demand from the food service and retail market channels provides opportunities for both Chinese and foreign companies in the further processing sector, it says.
Pan Chenjun, Senior Analyst at Rabobank, says that beef companies face the challenge of where to source consistent beef supply.
“They also need to develop, and even create, new markets by delivering new products and addressing the needs for convenience, tailor-made value-added products,” Chenjun said.
Rabobank says that to cope with the challenge, Chinese beef companies aim to participate in the whole supply chain – from farming to processing – in order to not only secure resources such as grassland, but also to take a strategic step to integrate the whole value chain.
During the process, both big companies and medium-sized companies will be actively participating in cross-border investments, it says.
Although such outbound investment is just at the beginning stage, Rabobank expects more investments to take place in the coming decade.
With Australia remaining the top consideration, South America is becoming a new interesting area and US market still remains uncertain, it says.
