China needs almost all the annual meat production of Brazil and Argentina to cater for its citizens’ burgeoning appetite for animal protein, according to a new report from accountancy firm PwC.
The report entitled China’s agricultural challenges: Roads to be travelled, said that China will need an additional 94 million tonnes of soybeans and corn for feedstock to meet the rising demand for meat from its increasingly affluent and urban population. It expects that China’s demand will rise from 57kg per person per year to 74kg – in line with Taiwan but far behind the US where per capita consumption is109kg.
That increase would require nearly the entire meat production of Brazil and Argentina in 2014 to satisfy demand. If the change happens over ten years, it will mean that an additional 15 million hectares of land – an area roughly equivalent to England and Wales – will be needed for agriculture.
“This will place enormous burdens on an already challenged domestic food system and have significant ramifications on international trade in agriculture,” PwC said in the report jointly authored by its China business group and agribusiness team.
The projections for future demand add context to China’s drive overseas in search of food for its still-growing population of over 1.3 billion. Chinese cooking oil producer Donlinks revealed last week it planned to bid for the owner of Australia’s single largest cattle estate S Kidman & Co. Other Chinese food groups including Shanghai Pengxin are reported to be eyeing the estate, as well as rival Australian beef producer Consolidated Pastoral.
Changing food consumption patterns have already had significant ramifications for China’s production of animal feedstock. China now imports 74 million tonnes of soybeans, equating to 87 percent of domestic consumption, up from 25.8 million tonnes, or 65 percent of its needs, ten years ago, as farmers have switched to higher value crops.
At the same time, pollution, water scarcity and land degradation reduce the land available for agriculture. The results of a second national land survey published last year showed that the country had 135 million hectares of arable land. But when land set aside for restoration or excluded because of pollution was included the number fell close to the authorities’ so-called “red line” minimum of 120 million hectares in production.
While these factors have been forcing Chinese enterprises to look overseas for farmland, PwC notes that most investments have been small due to political resistance. “Deals involving millions of hectares, or even hundreds of hectares invariably generate hostility and local hostility,” it said.