Q：What do you think is the main reason for the recent decline in beef prices?
A： The first reason is seasonal reason. Summer is a low-season for meat consumption. Another reason is the recent resurgence of Cov-19 which has something to do with imported cold chain products. When it comes to beef, it’s inevitable to be affected by cold chain import regulations. This gives rise to people’s panic which might lead to beef price decline. But rest assured, this issue is not as severe as feared. The last reason is the increase of goods arriving at ports. The increase of import quantity was brought up by the recovery of overseas shipping capacity and plays a crucial role in price fluctuation.
Q：Pre-made meals are becoming more and more popular nowadays. Beef and lamb are important ingredients in pre-made meals. Do you think this will spur beef and lamb prices?
A： Yes. I think so. Lamb price has already increased by 8000RMB per MT within the past 14 days. This was mainly caused by large volume of purchase of beef and lamb by pre-made meal companies. On the other hand, there is reduction in lamb production overseas especially in New Zealand. The shortage of lamb supply is a major reason for price increase. At the same time, in the Chinese domestic market, lamb slaughtering rate has difficulty catching up, and the cost of feed, labor and transportation has been rising. These factors kept Chinese sheep farmers from expanding their sheep supply. Similar situations also apply to beef.
Q：Based on the current situation, how do you think the beef market will perform? And what attitude of Chinese domestic buyers will be like?
A： Based on the current situation, there will be a significant boost in large-volume purchase. End of August to beginning of October is usually high season for buyers to place orders and sell. If prices keep declining during this period, then the whole year will be harsh for the meat industry that even demand won’t stimulate price to increase notably. If buyers don’t make purchase now, there won’t be anything available by the end of next month either from overseas offers or domestic offers. The supply is scarce because beef traders seldomly sell old products. It has always been freshly imported products that are sold first. To sum up, the market is likely to growth before October. How it will perform after October depends on unknown factors like economic, pandemic and transportation issues.