October 12, 2010

Argentina loses grip on global beef trade

The Argentine government restrictions on beef exports, designed to protect the domestic prices, risks leaving the country behind the lucrative trade, as population growth and an expanding middle class in China and elsewhere boost the global appetite for beef, producers warned.

"Argentina is missing opportunities. The market is growing and Argentina should be joining it. Instead, the government's policies for the sector are incomprehensible," said Dardo Chiesa, president of the Argentine Beef Promotion Institute.

The country's beef exports hit a record in 2005 of 771,427 tonnes, but are expected to be less than half that this year, at about 320,000 tonnes, according to reports.

Between 2002 and 2005, cattle stocks grew 12%, production rose 24% and exports doubled. This year, exports and production will languish slightly below 2000 levels and cattle numbers, at 48.9 million, are back to where they were in 2001.

To add insult to injury, neighbouring Uruguay is expected to export more beef than Argentina this year, and Uruguay has recently overtaken Argentina as the world's top meat-eating nation.

The domestic prices of beef are hugely important in Argentina, a country where most people consider a meat-free meal is equivalent to not eating.

In a bid to shield consumers from rising prices, Argentina banned beef exports in March 2006 for 180 days and has since enforced restrictions which producers say generated considerable uncertainty.

The devastating drought in 2009 has led to a 10% surge in slaughters compared with 2008. As a result of squeezed supplies, domestic beef prices have risen 70% in the past year.