China lifts Australian beef exporter bans as tensions ease

Five major Australian beef producers banned from exporting meat to China will be allowed to resume the trade immediately, in the latest move by Beijing to normalize economic ties with Canberra.

The Australian government was informed on Wednesday night the curbs would be relaxed, Agriculture Minister Murray Watt told the Australian Broadcasting Corp. on Thursday. China lifted curbs on three other local beef exporters in December, while shipments from two other suppliers remain restricted.

“That is fantastic news for Australia’s cattle producers, for our meat processing industry, for the workers in those industries and, of course, for Australian exports,” Watt said.

Beef was among a raft of Australian exports, including wine and barley, hit in 2020 when Beijing implemented trade restrictions in retaliation for Canberra’s call for independent investigators to be allowed into Wuhan to probe the origins of Covid-19. Diplomatic ties have improved following the election of the center-left Labor government in May 2022, and the majority of tariffs have been lifted, although rock lobster exports are still restricted. 

China’s embassy in Australia didn’t respond immediately to a request for comment.

While Beijing’s move probably won’t alter the market structure of China’s beef market, which is currently dominated by South American shipments, it will give its consumers more options, said Alice Xuan, an analyst with Shanghai JC Intelligence Co. Ltd. More high-quality Australian supplies can now compete with American beef, she said.  

Brazil is the dominant supplier of beef to China, accounting for almost half of market share, while Australia and the US supply 8% and 5%, respectively. 

Australian beef exports to China totaled more than 116,000 tons worth A$832.5 million ($550 million) in 2017, according to government statistics, after a free-trade agreement was implemented between the nations. 

Chinese beef imports have surged over the past few decades thanks to stronger demand from the growing middle class. However, expansion has slowed lately as a sustained economic downturn cut the purchasing power of consumers. 

The development is likely to accelerate exports of Australian beef to China, which have become cheaper compared to those from the US, said Matt Dalgleish, co-founder of agricultural consulting firm Episode 3. The US has largely captured the portion of China’s export market that used to belong to Australia, he said.

Other than China, Australia could also see greater demand for its discounted beef from other destinations where the US exports, such as Japan and South Korea, Dalgleish said.

China blocked beef exports from a major JBS SA plant in the US on Thursday after a controversial feed additive was found in shipments. 

Australia’s National Farmers Federation said it would continue to work with the government on removing the remaining trade impediments for the meat and rock lobster sectors.