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Business Insight


Business Insight

Meat Demand

More and more people in China are developing a taste for red meat. Leaders in Beijing are on a mission to satisfy the new demand by ramping up imports of beef. They've set off a battle for supplies around the world that's caused prices to soar. And companies that bring beef into Japan are finding it hard to keep up.

Japan imports about 60 percent of the beef it consumes.

Concerns are now mounting that it won't be able to meet demand.

Toshinori Ikemoto works at Sojitz Foods Corporation, a trading firm that imports beef and other products.

Among its main beef products are the fatty short plate. It's a common choice for beef-bowl chains, as well as lunch boxes sold at convenience stores.

The company has been able to consistently secure enough meat in the past. But China's rising appetite for beef has raised prices, making it difficult for Sojitz to import sufficient amounts of beef.

On this day, Ikemoto explained the situation to a company that processes beef for restaurant operators.

Six months ago, 1 kilogram of short plate cost about 6 dollars.

"Around 10 dollars. Much higher than before."
Toshinori Ikemoto / Sojitz Foods Corp.

That's an increase of about 50 percent in half a year.

"To be honest, I was really surprised. I didn't realize beef was becoming that expensive. If importers have problems securing sufficient amounts of it, they may soon become unable to satisfy customers."

Why is China buying up so much beef?

An international food show was held in Beijing last November.

Visitors included buyers from around the world who were on a mission to boost imports of beef and other products to their countries.

China's GDP per capita is almost 7,000 dollars. That far exceeds 3,000 dollars-- the level that's said to lead to higher consumption. As the Chinese population follows a more western diet, its consumption of beef is starting to explode.

Beef consumption is increasing even in rural cities where few people have tried the meat. Shanxi is an inland province located 500 kilometers west of Beijing.

This is a meat processing plant that handles imported beef from Australia.

Because the plant cannot keep up with demand, it is planning to expand its facility this year.

The buyer at the plant sells about 2.5 million dollars of imported beef.

"Japanese people are worried that China will buy up all the available beef."
Reporter's question

"If that's the case, why don't the Japanese people buy the beef from me? They should come to Shanxi Province. We've got plenty of it."
Chinese buyer

Faced with difficulties securing short plate, Ikemoto came up with a plan.

He is considering replacing it with parts that are used to make ground beef.

"We must avoid situations where people are unable to eat what they want. That would be very tough on consumers. I think our mission is to protect Japanese people from that kind of scenario."
Toshinori Ikemoto / Sojitz Foods Corp.

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