Wednesday, March 22, 2017

China retail meat price trends

Beef and pork prices have trended up but mutton is on the downtrend and chicken prices on a weaker trend according to the National Bureau of Statistics in China.
In Australian dollar terms, retail beef prices are equivalent to AUD$12.50 per kg on average and mutton retail prices average AUD$11 per kg. 

Below table graphic highlights Chinese meat imports in January 2017 compared with the previous year.




Food safety, the meat industry and scandals - a perspective

Recent history is full of scandals in respect to food safety and the latest Brazilian meat inspection scandal is but the latest stage in a long line of unsavory episodes.

Anyone who read "The Jungle", the famous book by Upton Sinclair, which launched the US government oversight of meat inspection, would be familiar with the very poor state of industry practices in the early 20th century in the meat packing districts of Chicago.

Australia - meat substitution scandal 1983. Corruption and criminality and the subject of a Royal Commission. Substitution of horsemeat and kangaroo meat in beef shipments to USA and discovered by US port of entry inspection. Species testing was carried out and it ushered in a range of revised Commonwealth oversight and meat inspection as well as the AUS-MEAT product description system and additional oversight and cost imposts.

USA and Australia - organochloride residues 1987. I was closely involved in this dispute as I was Australian representative of the Australian Meat & Livestock Corporation in New York at the time. It involved cattle grazing on sugar cane and potato remnants in pastures and beef was tainted with DDT and Dieldrin, products which had been banned in USA. The whole beef trade worth $1 billion from Australia to USA was in jeopardy and for a short time there was an embargo placed on Australian beef imports, at that time our largest beef export market.

USA E coli 1993. A deadly outbreak of E. coli 0157 in California in a chain restaurant called "Jack in the Box" which was using both domestic and imported beef.

UK Ireland Europe meat substitution scandal 2013. Corruption and criminality, substitution of horsemeat in meat sold in retail chains and other outlets. Possible breakdown in meat inspection protocols.

China chicken and food scandal OSI Foods 2014. Corruption and criminality. Poor oversight by firms and end users and out of date and contaminated meat and meat products.

Brazil meat inspection corruption scandal March 2017. Corruption, criminality. Dubious oversight of meat inspection and enforcement. Rotten meat found and inspectors dismissed. Implication of large international companies.  Early days.


Sunday, March 5, 2017

Indonesian beef market

Australia's populous closest neighbour is a large beef consumer given it is a developing country. Beef prices remain high in spite of a range of Indonesian government initiatives to keep beef prices stable and preferably around
IDR 80,000.  Recent Australian beef shipments have fallen in line with reduced cattle slaughter following a number of high production years caused by drought. February figures below, source: DAWR
The market takes a wide variety of beef cuts and beef offal and fancymeat, mostly in frozen form, due to the limited cold chain infrastructure and the stage of development. However, supermarkets and food service consumption is rising in line with population increases and relatively strong economic growth.

Government efforts to limit beef price increases in recent years have included relaxation of rules to allow import of Indian buffalo meat and also relaxation of weight limits on slaughter cattle imports from Australia. A wider search for alternative supplies has been conducted with small tonnages imported from as far away as Spain.

Below graphic indicates a range of commodities and shows recent increases in beef prices as well as other commodities. This has revived discussion of possible cartels in relation to the beef market in the country. Source: Jakarta market monitoring agency.

http://www.tribunnews.com/bisnis/2017/03/03/pemerintah-serius-perangi-kartel-daging-sapi TRIBUNNEWS.COM, JAKARTA - The Ministry of Finance signed a cooperation agreement with the Business Competition Supervisory Commission (KPPU) to suppress the price of beef in the market.In monitoring the government, the price of beef is currently very strong cartel practices. You see, in addition to local production, the supply of beef in Indonesia is still filled by imported meat.However, although imports of cattle and meat products increased by up to a dozen times, but prices continue to remain high. This confirms the existence of cartel practices in the meat market.To that end, the government together with the Commission to prepare a fine of up to Rp 25 billion to provide a deterrent effect.