China Ends Complete Ban on Beef From U.S. as Imports Explode

(Bloomberg) -- China removed a ban on shipments of some U.S. beef products, opening up the trade for the first time since 2003 as the country sees a surge in imports of the meat.

The ban on imports of U.S. bone-in beef and boneless beef for livestock under 30 months has been removed, with conditions, effective immediately, according to a statement on Thursday from the General Administration of Quality Supervision, Inspection and Quarantine. Imports must follow requirements under China’s traceability, inspection and quarantine systems, it said.

China halted imports of U.S. beef in 2003 after a case of mad cow disease was found in Washington state. The country is the world’s second-biggest beef buyer after rapid growth over the past decade created the world’s second-largest economy and an expanding middle class that can afford more protein in their diets. China is already the world’s biggest pork consumer.

The re-opening of China to U.S. beef may provide new opportunities for packers including Tyson Foods Inc., the largest U.S. meat processor, and  Cargill Inc., the largest U.S. ground beef maker. Cargill didn’t immediately responded to an e-mail requesting comment.

“We applaud the efforts of USDA that have led China’s Ministry of Agriculture to lift its ban on U.S. beef,” Springdale, Arkansas-based Tyson said in an e-mailed statement. “This is a positive step forward and we hope that the two governments can negotiate a strong access agreement for this important market in the near future.”

Rising Imports

China increased imports of beef by 51 percent in the first seven months of 2016 compared with last year because of slower domestic production caused by thin margins for Chinese cattle producers and the availability of cheap imports, Rabobank International said in a report. Beef and veal imports will jump 24 percent this year to 825,000 metric tons, according to U.S. Department of Agriculture data. That’s twice the purchases in 2013.

China’s consumption will increase 3.4 percent to 7.59 million tons, exceeding production of 6.79 million tons, the data show.

Surging demand had been a boon to Australian producers after a drought increased cattle slaughter and supply available for export. The country has recently been losing market share to Brazil, which was allowed to resume shipments to China last year.

Philip Seng, president and chief executive officer of the U.S. Meat Export Federation said in a statement Thursday that China still has to negotiate with the U.S. Department of Agriculture about conditions that will apply to U.S. beef exports entering the market.

USMEF is waiting for “details about the remaining steps necessary for the market to officially open and for U.S. suppliers to begin shipping product,” Seng said in the statement.

--With assistance from Shruti Date Singh To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net, Lydia Mulvany in Chicago at lmulvany2@bloomberg.net. To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Simon Casey at scasey4@bloomberg.net, Robin Saponar, David Marino