December 7, 2005

Argentina takes steps to discourage beef exports

Argentina's government has implemented policies to discourage beef exports in order to increase the meat's domestic supply. The final objective was to try controlling rising prices and inflation. 

The government blamed escalations in cattle and retail beef prices on growing beef exports, in light of Brazil's recent foot-and-mouth disease outbreaks.

Rebates of 200 "sensitive" products, mostly food, were suspended in mid-November. Export rebates for beef cuts and thermo-processed beef products were 2.7 percent and 5 percent respectively. The government also raised export taxes on beef cuts from 5 percent to 15 percent, while keeping export taxes on canned and cooked beef products at 5 percent.  Thus, Argentine beef exports are forecast to slow down in the near term.

As result of these measures, analysts estimate that Argentina would export about 200,000 tonnes (carcass-weight equivalent) less beef in 2006. Frozen boneless beef exports to markets such as Russia, Egypt and Morocco are expected to suffer the most.

Despite the latest measures, Argentine meat packers and cattlemen said the country's beef prices were supported mainly by strong domestic demand. They added that domestic consumers demanded almost 80 percent of the country's total beef supply, and thus exports had limited impact on prices.