April 27, 2009

Beef exports from South America are slowly recovering after the sharp decline in late 2008 resulting from the global financial crisis and currency exchange volatility.

Shipments from South America increased five percent to 342,000 tonnes swt during the first quarter of 2009 compared to the previous quarter, but volumes were still 13-percent down from the first quarter of 2008.

The recovery is spurred by rising demand from South America's key markets. Exports to Russia have increased steadily in the first quarter, accounting for 37 percent of total shipments, while volumes to the EU have also recovered. Last year's beef stocks have been cleared and importers have adjusted to the new credit and currency environment, according to trade sources.

Although volumes have increased over the previous quarter, total revenues fell 20 percent in US dollars terms because of a 24-percent drop in average export prices. The fall in prices was influenced by the devaluation of South American currencies, major importers quoting lower prices and a shift in trade towards manufacturing and secondary cuts.

The major beef suppliers in South America are Brazil, Argentina and Uruguay.