Question: This week, we have seen a pause of the recent plunging in beef prices offered by overseas suppliers. Do you think now is the time to place orders?
Answer: Now is the appropriate time to purchase beef from overseas suppliers. Beef produced by South American plants is likely to increase in price around August. When it comes to sufficient utilization of money, July might serve as a good timing to place purchase orders. Based on past experience, there won’t be many people selling at low price in July or August. As calculated, if buyers place orders in July, their products will arrive at ports around October. This will fit in well with the high demand period in the end of the year to sell beef in the Chinese domestic market. For those trading companies with affluent fund, it’s also advisable to purchase spot beef now because based on current situation, spots are cheaper than futures.
Question: Now that lockdowns and travel bans have been lifted in China, is it possible that Chinese domestic demand will recover?
A：Yes, there has been some rebound. Manufacturers’ selling speed is anticipated to accelerate recently, especially for conditioned beef that are widely used in wholesale markets, catering business and retail stores. Most consumers don’t have time to spend hours preparing and cooking beef properly, that’s why they tend to choose conditioned beef for convenience and time-saving reasons. The ease of lockdowns and travel bans triggers enthusiasm in tourism demand and it coincides with the summer season which will add up to further boost catering business. There will be increase in demand for meat used in cold dish and pre-cooked meals. When catering business runners purchase meat, they should take into account the waste food problem and should probably prepare more beef to compensate the food loss.
Question: Beside beef, what is the trend of other categories, such as pork and white shrimp, in the second half of the year? Is it time to purchase these products?
A: In my personal point of view, as long as these categories’ prices are close to historical low point, it’s okay to purchase. Because when the price is near its historical low point, there’s no chance that it’ll plunge substantially.
Pork prices offered by overseas suppliers stand at the equivalent level of 2020’s high point. Pork price is determined by Chinese market’s adjustment. If there is a high stock of pork in China, then imported pork will not enjoy much popularity. If the domestic stock decreases, pork of Chinese origin will increase in price. But in the global market, there’s been over-capacity in pork production. But due to the consistent high price in the Chinese market, added up with other factors, it’s not possible for the global pork price to drop in the short run.
There is significant increase in lamb price recently. Lamb prices offered by overseas suppliers are at a relatively low level. This is a good opportunity to import lamb from overseas manufacturers. The lamb market in the second half of this year looks quite good with price in reasonable range. Based on the first half of this year’s performance, lamb selling in the northern part of China is quite good amid the pandemic’s impact on commodity circulation.
In the second half of this year, with the weather getting cooler and restaurants restarting dining-in, there’ll be great stimulus in hot-pot and barbecue consumption which all demand great volume of lamb. Even though, beef production overseas has been gradually increasing in recent years, overseas lamb production is declining, which will pose positive impact on the future lamb prices.