Latest developments in Asia & Oceania. Peter Weeks Chief Economist Meat & Livestock Australia

Transcription

1 Latest developments in Asia & Oceania Peter Weeks Chief Economist Meat & Livestock Australia

2 Outline Beef production trends Drivers of beef production Beef trade issues Long term beef projections

3 Beef production growth 2 to 29 Selected Asia & Oceania 1, Annual growth ' tonnes cwe tonnes % change Annual % change Brazil s production growth was 2.7mt China Indonesia Source: GMI Centre for International Economics NZ Australia Malaysia Korea Japan Philippines

4 Productivity is increasing in China & Australia beef production per head (kg cwt) Japan 1 8 Australia 6 4 New Zealand 2 Brazil China Source: USDA FAO

5 The drivers of production growth Price Growth in demand for beef Traditional diet Population growth Income growth Availability of inputs Land resources Water - droughts & climate change Feed

6 Global meat prices on the rise

7 Despite their production growth, prices within China have also increased rapidly in recent years 35 3 RMB/kg Beef Cattle Sheepmeat Pork Source: China's Ministry of Agriculture

8 Growth in demand for beef

9 Red meat is only a small part of Asian protein diets, well behind fish, pork & poultry Proportion of Total Meat Consumption by Major Species, Selected Countries, 29 per capita 118 kg 55 kg 81 kg 15 kg 18 kg 12 kg 12 kg % of total Source: UN FAO database & various Fisheries Departments From talk by Dr. David Hughes (Imperial College) at NTCA Conference 21

10 Meat consumption is driven by two basic factors population and income Growth in world population 1 billions 8 Growth in world GDP US$ (trillions) 8 6 Current crisis

11 Concentration of population growth in Asia Distribution of additional world population (21-23) -1% 35% 54% 4% 5% %

12 Rapidly increasing populations Indonesia (52 million growth - 24%) 3 millions Philippines (39 million growth - 45%) 14 millions China (15 million growth - 11%) 16 millions

13 China Forecast income growth to Percent Japan EU-27 US Canada NZ Australia Mexico Brazil S. Korea Russia Philippines Indonesia Vietnam Saudi Arabia Pakistan India Source: IDB Database, USDA Agriculture Long Term Forecasts

14 Hence, a substantial increase in demand for meat

15 Demand is trending up! Price is trending up! So why have we not seen a commensurate rise in beef production?

16 Scarce land & water resources (except Oceania) Acre Arable land and water availability comparison Source: FAO, World Development Indicators & United Nation m 3

17 Competition for land Urbanisation & Industrialisation Population growth urbanisation lack of land profitability crops Dairy, deer, forestry

18 Feed availability Pasture Oceania Cut & carry vegetation Indonesia & elsewhere in South East Asia Grass silage China Grains Japan, Korea & growing component in Australia, China

19 Asia and Oceania is getting drier Change in average precipitation 2s (2-29) on 197s mm

20 and the globe is getting hotter

21 Australia s dry decade 2-29 Rainfall deficits Cattle distribution wet dry

22 It is of little surprise that feedlots are becoming more important: such as in Australia 3, ' head Australian feedlot growth grainfed cattle marketings % 4 2,5 grainfed as % of adult slaughter 3 2, 1,5 2 1, Source: MLA/ALFA Quarterly Feedlot Survey

23 Exports of feeder cattle to a rapidly expanding modern feedlot sector in Indonesia 1, ' head numbers value $A million f

24 Asia s beef trades Japan & Korea imports from US & Oceania - 616kt India to Asia - 26 tonnes Brazil to Asia tonnes Cattle from Cambodia and Burma to Malaysia and other countries?

25 The big emerging trades into Asia India s beef trade Brazil s beef trade ' tonnes swt Malaysia Philippines Vietnam ' tonnes swt Hong Kong Philippines

26 Key beef trade trends in Asia Demand downturn due to GCC & recessions Mainly in Japan other Asia & Oceania only small local demand impacts Major, disruptive currency shifts Lower beef and cattle prices US re-entry into Japan and Korea Increasing beef imports to China & South East Asia Strong competition from Brazil and India in some markets FMD outbreaks in Japan, Korea, China, Hong Kong & Taiwan Import barriers especially around 4% tariffs into Japan & Korea & difficult access to China & Malaysia

27 Long term trends Potential consumption growth substantial Production growth slow Import growth substantial Export growth from Australia and South America

28 World beef consumption projected to rise by around 1mt in coming decade 3 Beef consumption growth (million tonnes) Brazil USA India China Argentina Mexico Korea Indonesia Japan Russia & other

29 Little beef production growth expected in Asia with main growth in the big 4 plus Oceania 2,5 2, Projected beef production growth (million tonnes) FAPRI GMI 1,5 1, 5-5 Brazil China US India Australia New Zealand Indonesia Argentina South Korea Thailand Canada Philippines Mexico Japan European Union

30 Models confirm expected growth in net imports by Japan, Korea, the Chinas and South East Asia 2,5 2, Net export growth (million tonnes) FAPRI GMI 1,5 1, , Brazil Australia India NZ Argentina Canada Thailand Indonesia Philippines the Chinas Korea US EU Mexico Japan

31 Cattle prices expected to trend up US /kg lwt Aust grass fed Aust grain fed US grain fed projections

32 Questions?