Jinan Zhuocheng Bio-Tech Co., Ltd.

On April 28, 2026, the Customs Tariff Commission of the State Council issued an announcement to implement zero tariffs on 100% of tariff lines for the 53 African countries that have established diplomatic relations with China, effective May 1. Frozen products such as beef and mutton are included as core items. While this policy promotes China-Africa trade, it will also profoundly impact the supply and demand structure of China’s domestic beef and mutton market. As upstream players in the industrial chain, veterinary drug trading companies also face market restructuring and transformation pressures.

Policy constraints mitigate short-term shocks

Many market participants worry that low-cost African beef and mutton will flood the Chinese market. However, the policy includes multiple buffer mechanisms. The zero-tariff policy applies only to the 53 African countries with diplomatic relations with China, excluding non-diplomatic countries. At the same time, strict inspection and quarantine access requirements serve as the first threshold. China has previously suspended the import of cloven-hoofed animal products from certain African countries, such as Uganda, meaning that only countries meeting disease control requirements can actually export. Additionally, quota management continues to act as a safety valve. For beef, for example, the import quota for 2026 is approximately 2.7 million metric tons, with any excess subject to a 55% tariff, effectively limiting a sudden surge in imports in the short term. Rules of origin also clearly prohibit the transshipment of products from other countries through Africa, ensuring the policy benefits Africa’s local livestock industry. Overall, this is a two-year pilot opening. While short-term shocks are generally manageable, the policy will have a sustained impact on China’s mid-to-low-end beef and mutton pricing system over the medium to long term.

Domestic market changes: low-end pressure, high-end divergence

The price advantage of African beef and mutton is very clear. Under zero tariffs, the landed price of South African beef is expected to be 10% to 15% lower than that of Brazilian beef, while Kenyan mutton could be more than 20% lower than Australian and New Zealand mutton. These low-cost products will primarily impact China’s low-end frozen beef and mutton market. Prices for low-end frozen beef are expected to drop by 5% to 10%, and mutton by 8% to 12%, with the greatest impact on bulk purchasing channels such as catering and processed food sectors. However, the impact on the mid-to-high-end market is almost negligible. Domestic consumers have a strong preference for fresh, freshly slaughtered, traceable domestic beef and mutton, which African frozen products cannot easily replace. By the end of 2026, domestically produced beef is still expected to account for more than 75% of the total market, and domestic mutton for nearly 90%. Imported African products will mostly serve as a supplement to the low-end market, rather than a disruptive force.

That said, this “low-end supplement, high-end stable” pattern will place structural adjustment pressure on domestic livestock farming. Small and medium-sized farmers with high production costs and low efficiency will see their profit margins further compressed, potentially accelerating their exit from the market. In contrast, large-scale, standardized, branded farms may gain a higher market premium due to their quality advantage. These changes will directly affect demand for veterinary drugs.

Upgrading in farming drives shift in veterinary drug demand from “treatment” to “efficiency and quality”

As competition intensifies in the low-end frozen meat market, domestic farmers must abandon low-level, homogeneous expansion and instead focus on improving quality and efficiency. For the veterinary drug industry, this means a fundamental shift in demand structure.

On the one hand, surviving large-scale farms will pay more attention to preventive healthcare and meat quality improvement. Demand for traditional therapeutic antibiotics will decline significantly, while green, compliant alternatives such as Chinese herbal medicines, probiotics, and enzyme preparations will see rising demand. Functional additives that improve meat color, intramuscular fat, and flavor will also become new growth points. The use of vaccines will increase, as reducing disease means lower drug residue risks and enhanced product competitiveness.

On the other hand, farmers will become much more sensitive to input-output ratios. Veterinary drugs that help improve feed conversion rates, accelerate slaughter times, and reduce mortality will be more popular. This means that veterinary drug trading companies can no longer simply sell products; they must shift toward offering integrated solutions with quantifiable benefits.

Opportunities and strategic adjustments for veterinary drug trading companies

Facing structural changes upstream, veterinary drug trading companies need to proactively adjust their strategies. The first is a shift in target market: from serving small and medium-sized farmers to supporting large-scale farms. These customers have large, stable procurement needs and place a high premium on product compliance and quality. They also have high requirements for suppliers’ international registration capabilities (e.g., FDA, EU certifications) and technical service capabilities. The second is a shift in product lines. Companies should increase the introduction and promotion of alternatives to antibiotics, functional additives, high-quality premixes, and vaccines, while phasing out low-efficiency, residue-prone conventional drugs.

Furthermore, Africa itself is emerging as a blue-ocean market for veterinary drugs. With African beef and mutton exports to China expected to rise (South African beef exports to China could exceed 100,000 metric tons by 2027), Africa’s local livestock industry will shift from subsistence farming to export-oriented large-scale farming, driving a sharp increase in demand for disease prevention. Veterinary drug trading companies can export cost-effective Chinese active pharmaceutical ingredients, vaccines, disinfectants, and other products to Africa, and even offer one-stop services ranging from farm planning and disease prevention protocol design to drug residue testing. Compliance capability will be a key competitive barrier. Companies with GMP certification, traceability systems, and international registration experience will have a clear advantage, whether serving large-scale domestic farms or expanding into the African market.

The implementation of zero-tariff policies for beef and mutton from 53 African countries, on the surface, is a trade policy adjustment, but in essence, it signals a push to phase out outdated livestock production capacity and drive industrial upgrading in China. For veterinary drug trading companies, the old model of serving small, inefficient farmers with cheap generic drugs is no longer sustainable. The real opportunities lie in serving large-scale, branded, green advanced production capacity and in tapping into the emerging African animal health market that this policy will help create. Over the next three years, veterinary drug trading companies that can help customers reduce costs, improve efficiency, meet antibiotic-free farming requirements, and possess international market access capabilities will gain significant room for growth in this transformation.