Trade

Argentina about to resume beef exports to China, but no sign yet of Brazil’s return

Jon Condon, 30/09/2021

ARGENTINA will resume beef exports to China from Monday next week, but after almost four weeks in suspension, there is no sign yet of a China export trade resumption out of Brazil.

The loss of both South American suppliers has left a large void in China’s imported beef supply.

Argentine officials announced on Wednesday that restrictions on beef exports to China will be lifted from October 4 – about one month sooner than originally planned. The decision followed negotiations with local producers, after the country’s elections on September 12.

Producers seeking removal of all export restrictions had argued that the limitations were inflicting economic harm on Argentina’s livestock and meat industries while doing little to help domestic consumers.

China accounted for 76pc of Argentina’s beef exports for the year to August. Argentina accounted for 21pc of China’s imports for the year to August, second only to largest exporter Brazil, which held a 38pc share.

Earlier, Argentina had planned to restrict volumes shipped to China and most other markets to 50pc of the year-ago average through the end of October, though exemptions were already in place to fulfil certain tariff rate quotas for the European Union market, including the Hilton and High Quality Beef/481 quotas, plus the country’s 20,000t quota for export to the United States.

Back on May 17, the Argentine government imposed a surprise 30-day ban (later extended) on all beef exports out of the South American nation, in an effort to contain domestic meat prices and curb inflation.

Argentina’s chilled and frozen beef exports to China in August totalled 32,800t, well below the 50,000t shipped in May ahead of the government curbs on exports.

No sign of Brazil re-entry

Meanwhile, there is still no sign of resumption in beef trade to China out of Brazil, after Brazil’s self-imposed suspension on September 4 following confirmation of two atypical BSE cases in separate states.

Almost four weeks has now passed since Brazil’s voluntarily suspension. Many had predicted a resumption of trade after a fortnight, based on events that unfolded the last time the country reported a case of BSE back in 2019.

Chinese meat trade analysts are concerned about the impact, the longer the suspension stands – particularly as China is approaching important National Day holidays and a high consumption period.

“At present, due to the expected supply shortage, imported beef market prices continue to rise,” China’s Meat International Group said in a report issued this morning.

Due to the earlier restrictions on beef exports Argentina’s export volumes fell 33pc in August, compared with the previous month, MIG reported.

“Brazil’s suspension on September 4 may cause larger uncertainty to the future market supply,” the group said.

“So far MIG’s intelligence is that there is not a technical problem, causing the prolonged delay, but more of a problem with China’s willingness to open up. Political diplomacy has a greater impact on the progress of re-opening. It could also involve Brazil’s presidential election and a series of recent diplomatic events that have turned unpredictable,” MIG said.

Five other customer countries applied their own suspensions following Brazil’s BSE announcement earlier this month, most of which are yet to allow exports to recommence.

Questions continue to be raised in trade circles around the Brazil’s unusual announcement of two atypical BSE cases at the same time.

The US National Cattlemen’s Beef Association’s chief executive Colin Woodall said earlier this month that “Given Brazil’s history of failing to report BSE cases in a timely manner, we must remain vigilant in enforcing our safeguards and holding them accountable.”

This may partly explain China’s reluctance to re-open beef trade with Brazil, trade sources said.

 

 

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