January 18, 2013

Beef exports in Mercosur countries substantially improved in 2012 with an on-year increase of 12% to 1.5 million tonnes, basically due to growing global demand for protein, combined with depreciating South American currencies.

The Brazilian Real depreciated 14% on-year in 2012, and combined with increased Brazilian production, assisted the price competitiveness of Brazilian beef on the global market. Exports increased 15% on-year, to 945,482 tonnes swt, with Russia the major market (accounting for 27% of total exports). Shipments to Russia increased 11% on-year in 2012, to 253,924 tonnes swt, while exports to Chile and Egypt rose substantially, up 91% and 37% respectively.  Due to political instability, shipments to Iran continued to decrease in 2012, down 48% on-year, to 67,768 tonnes swt.

After a Foot and Mouth Disease induced disruption to trade, Paraguayan beef exports rebounded in 2012, with shipments reaching 185,102 tonnes swt. Assisted by lower export prices throughout 2012, trade with Russia was robust, up 142% on-year, to 130,031 tonnes swt.

Uruguay also increased exports, up 12% from year ago levels, to 253,798 tonnes swt. Russia was again the major market, however exports decreased 14%, to 97,518 tonnes swt, while shipments to China and the US surged in 2012, up 74% and 27% on-year, respectively.

Argentina was the only South American country to record a decline in beef exports in 2012, with shipments for the January-November 2012 period down 22% on-year, at 110,845 tonnes swt - the lowest total volume in 10 years. Argentina's competitiveness has been heavily impacted by the government decision to ensure an adequate beef supply for the domestic market through the implementation of export quotas. The primary market for Argentina in 2012 was Chile, where shipments increased 31% on-year, to 26,305 tonnes swt.

Looking forward, South American beef exports are forecast to remain high in 2013, underpinned by the continuing global demand for cheap protein.