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By Kirsty Needham and Colin Packham
SYDNEY (Reuters) – China has suspended meat imports from four of Australia’s largest meat processors as trade in several key agricultural products is affected by sour ties stemming from a dispute over the COVID-19 pandemic.
The suspension comes after Australia last month requested an independent investigation into the origins of the new coronavirus and just days after China proposed to introduce an 80% tariff on Australian barley shipments.
Commerce Minister Simon Birmingham described the import suspension as “disappointing” but denied it was a retribution from China for Australia’s desire for an investigation into the coronavirus.
China rejected the need for an independent investigation, and Beijing Ambassador to Australia Cheng Jingye in late April said Chinese consumers could reject Australian products in response to Canberra’s support for such an investigation.
Chinese Foreign Ministry spokesman Zhao Lijian told reporters that China’s customs agency “continually” found cases of Australian companies that had violated inspection and quarantine requirements and suspended imports to “ensure safety and the health of Chinese consumers. “
“(Chinese customs) notified the relevant Australian departments and asked them to fully investigate the reason for the problem and fix it,” Zhao said during a daily briefing in Beijing.
He added that the suspension was not related to the bilateral dispute over COVID-19.
Beijing also cited labeling problems when the same companies and two others lost their licenses to ship meat to China in 2017 for several months.
“Thousands of jobs are related to these meat processing facilities. Many more farmers depend on them to sell livestock at those facilities,” Birmingham told reporters in Canberra.
Executive Chairman of the Australian Meat Industry Council Patrick Hutchinson said the companies accounted for about 20% of Australian beef exports to China.
Australian meat exporters knew about the Chinese labeling requirements, Hutchinson said.
“Sometimes their tolerance levels go up and down. This time we have a situation where tolerance is quite low for this problem.”
TRADE WORRIES WEIGHT
Valued at more than A $ 3 billion ($ 1.94 billion), Chinese demand for Australian beef increased in 2019, fueled by a growing middle class and as consumers switched to eating beef as The availability of pork decreased during a swine fever outbreak that decimated Chinese pig herds.
China is by far Australia’s largest trading partner, with around 38% of all exports in 2019, and the growing dispute weighed on the Australian dollar on Tuesday.
“The first barley now is beef,” said Stephen Innes, head of global market strategy at AxiCorp. “The Australian has been under pressure most of the day due to tariff problems with China.”
Australia was the third largest meat supplier to China in 2019, after Brazil and Argentina. China’s beef imports increased in the first quarter of 2020, despite a sharp slowdown in demand as consumers stay away from restaurants after the coronavirus outbreak.
“The impact in China is very small,” said a Chinese beef buyer with a state trading company. “There are many other countries that export to China. There are no products (from Australia) that cannot be replaced.”
“There is too much meat and the prices are weak,” said the importer.
JBS said in a statement that it was working with Australian officials “to understand the technical problems China raised” and that it would take corrective action.
Kilcoy Pastoral Company, its owner, New Hope Group of China, and Northern Cooperative did not immediately respond to requests for comment.
China has pledged to increase its purchases of US agriculture, including beef, under a phase one trade agreement with the administration of President Donald Trump.
US corn and sorghum producers could also benefit if Australian barley exports to China are affected by a large tariff. Barley, like corn and sorghum, is often used in animal feed in China.
Australia is the main supplier of barley to China, sending around A $ 1.5-A $ 2 billion of the grain each year. China takes more than half of Australia’s barley exports.
(Reports by Kirsty Needham and Colin Packham; Additional reports by Huizhong Wu and Dominique Patton; Edition by Tom Hogue, Lincoln Feast, and Emelia Sithole-Matarise)
