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Ran by the Chinese Government, Xiamen Xiangyu. purchases 20,000 tonnes of beef from Australia per month.
However, Chinese bans on four of Australia’s largest abattoirs could threaten that arrangement, and the company have warned they may have no choice but to switch to US beef if the trade war rattles on.
The move would be a huge blow to Australian farmers’ $3.81 billion beef business with China, which equates to 25 per cent of all exports of the meat.
In May, Beijing halted meat imports from four red meat abattoirs, citing issues with health certification and labelling.
China has also imposed an 80 per cent tariff on Australian barley, a move that could be fatal to drought-ridden farmers.
Due to the bans, Xiamen Xiangyu has been forced to trade with other Australian abattoirs.
Whilst the call holds the prospect of switching to American alternatives, for now, the company has warned temporary arrangements have increased costs and complicated trading.
Speaking to the Australian Financial Review, Eric Huang, director of frozen food for the company suggested the current situation is unsustainable.
Mr Huang said: “if these four plants are not relisted as early as possible we will have to switch to US beef.
“We have time to purchase more, to make up our supply to our end-users.
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“But if this lasts for six months it is going to be hard because moving from one plant to other plants not only increases costs but we also have to educate our end-users.”
The company, with contracts worth millions, will wait three months before turning to American suppliers.
Mr Huang also confirmed suggestions that more Australian companies could be delisted in the coming months.
Reports estimate four plants could be relisted.
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In 2017, six abattoirs were delisted but survived after receiving the green light from China three months later.
The Australian Government has been made aware that four companies have suspended trading with China.
Two Queensland abattoirs, owned by Australia’s largest meat processor, JBS, Kilcoy Pastoral Company next to Brisbane and Northern Co-operative Meat Company at Casino have stopped trading.
Tariffs on beef are also slipping according to Mr Huang, who revealed that Australian beef was no longer very competitive.
His outfit has switched to France and Canadian barley following the 80 per cent tariff on Australian barley.
It is believed that the barley tariffs were in response to an anti-dumping investigation.
Tensions continue to grow between the two with China referring to Australia as a “frustrating” and “un-friendly” trading partner.
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