It is a common phenomenon on that frozen product prices fluctuate from time to time. To help you get a better grasp of the changing market, Coldeal now introduces the Q&A section with market experts to give you valuable analysis on the current market and acute predictions for the future.
Q： The recent external beef price is dropping, which gives more room for price bargaining from Chinese internal market. What’s your take on the overseas beef price?
A： The price drop among overseas beef suppliers has something to do with the Chinese market’s seasonal shift。China is located in the northern hemisphere, as the weather gets hotter and hotter people start to cut their meat consumption. Even though this year’s shipping schedules and export volumes have resumed to normal, there still remains leftover inventories from last year which adds up with over-capacity in cattle slaughter therefore leads to this year’s price decline. If you look at past records, you’ll find June to August to be low meat consumption months. Meat consumption will rebound when colder weather approaches. Overseas beef prices stay align with demand from Chinese market and are likely to recover after the hot season. In addition, under the influence of global freight shortage, rising food and feed prices and inflation in some countries, beef prices are unlikely to fall sharply as in 2019, and are generally bullish.
Q：In the past week, what is the selling situation of imported beef in major Chinese markets? What is the price trend?
A：Right now, due to the hot weather, imported beef is being sold at a slower pace in China. The pre-existing beef inventories are not a determining factor for the slow performance in beef selling, because beef consumption is China is much smaller than pork. I think China’s beef price decline will last for another month. Recently, the average price of several main beef categories, for example, the back part meat has fallen by 5000 yuan per ton, and now it is about 60 yuan per kilogram. Many factories have shut down because of the pandemic’s impact. When the pandemic eases and the seasonal demand growth fills the previous gap, beef prices will rise again.
Q： How soon do you think the current situation of high inventory of beef will be mitigated?
A：Beef is not the main source of animal protein among Chinese consumers. Beef inventories in China are not as high as pork. When consumption picks up in autumn, beef inventories will be consumed fairly quickly. We can notice that beef consumption in China now enjoys greater potential than pork, especially in the sectors of pre-cooked meals, hot-pot and BBQ which are gaining substantial popularity. Beef is easier to cook in these forms of dining and tastes better than pork. Therefore beef consumption is positive in the Chinese market for the long run.