February 25, 2020
Argentina's beef exports to China fell 30% in January
Mario Ravettino, head of ABC, a consortium of Argentine meat exporters, said sales have fallen due to the coronavirus outbreak and price disputes with buyers in China, reported Reuters.
China's demand for meat to supplement dwindling domestic pork supplies caused by the African swine fever (ASF) outbreak meant Argentine frozen boneless beef exports to China doubled to 408,500 tonnes at US$2 billion in 2019.
China accounted for three quarters of Argentina's beef exports as Chinese buyers paid higher prices in the wake of the ASF outbreak.
However, Ravettino said January 2020 sales dropped an estimated 30% to 31,500 tonnes compared to December 2019 sales of 44,878 tonnes. Chinese importers are renegotiating deals for lower prices because the coronavirus outbreak has affected port activity.
The January total is still higher compared to January 2019.
The ABC head said China had limited credit to Chinese companies for meat imports from Argentina at end-2019, and diversified purchases to other countries in an effort to lower contract prices. As a result, many orders were cancelled.
He added that deals have dropped to US$4,300 per tonne compared to US$7,000 per tonne at its peak.
The measure imposed by China has also affected farmers in Argentina. Nicolas Lafontaine, a rancher from Buenos Aires said prices have fallen as buyers are more particular over their livestock purchases.
Lafontaine said previously, buyers will buy any livestock for China, but now there is distinction between low quality canned beef and high quality beef.
Ravettino said the coronavirus outbreak in China has caused logistical problems at ports in China, which has affected Argentina shipments. He said ports are overflowing with merchandise and the quarantine (imposed because of the coronavirus) meant port workers aren't going to work.
He said some Argentine shipments have diverted to Singapore, while other exporters are exploring the possibility of increased sales to Russia.
Ravettino said while China recognises the quality of Argentine beef, he is unsure how long the problems at China will last, whether it be two months or six months.