Frozen beef importers in Israel are bracing themselves for price increases of 15-20%, sources inform "Globes." The beef sector is also preparing for a possible shortage in the market. As far as is known, the main effect will be on frozen beef prices, with processed beef products being affected later. The prices rises are a result of an outbreak of African swine fever in China, which has increased the demand for beef in the country. The increase in retail prices is liable to be greater than the increase in wholesale prices.
Sources in the beef sector said that in meetings between South American beef suppliers and the major beef importers in Israel, suppliers from Argentina, Uruguay, Paraguay, and Brazil made it clear that demand for beef in China had surged, after more than 200 million pigs had been destroyed in that country because of African swine fever. The sources said that the shortage of pork in China had cause an increase in Chinese beef imports from South America. The sources estimated that 30% of South American beef production was being sent to China. The meetings between the Israeli importers and the South American beef suppliers took place at the Anuga food fair in Cologne, Germany during the Jewish holiday period.
An outbreak of African swine fever was detected on a Chinese farm last year, causing the death of pigs on the farm. The plague spread throughout China and the neighboring countries - Vietnam, Mongolia, and Cambodia - and affected the global beef market. According to a Bloomberg report last May, over 100 million of the 440 million pigs in China were destroyed this year, the worst such case since the 1970s. Figures published by the Chinese Central Bureau of Statistics show that the price of pork this year is 70% higher than last year.
As a result of the situation in China, pork imports rose, but in order to meet the demand for meat in the country, beef imports also rose dramatically. Over the past year, pork prices in Europe and the US rose by 30-50%.
A forecast by the International Beef Alliance revealed at the Anuga food fair predicts an increase of over 20% in Chinese beef imports in 2020. The report projects that direct beef purchases by China will account for 30% of the beef sold worldwide next year.
The International Beef Alliance report adds that this increased consumption will increase beef prices in China. Most frozen beef imported by Israel currently comes from South America. For reasons of kashrut, Israelis usually buy only kosher beef cuts. A local importer told "Globes" that South American beef merchants are likely to prefer markets in which the entire cow is purchased, in order to obtain a higher price for the same merchandise.
Beef consumption in Israel has increase substantially in recent years, especially (refrigerated) fresh beef. Ministry of Agriculture and Rural Development figures show a 25% rise in average per capita beef consumption in 2015-2017. In general, most fresh beef in Israel comes from calves sent to Israel from overseas. At the same time, imports of refrigerated fresh beef rose from 6,391 tons in 2016 to 14,260 tons in 2017 and early 2018.
Published by Globes, Israel business news - en.globes.co.il - on October 30, 2019
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