April 3, 2020
Argentine beef exports to EU, China plunge amid virus
Beef export from Argentina's cattle ranches to the EU have plunged to almost zero amid the global COVID-19 outbreak, while sales to top buyer China have tumbled from last year's levels, industry officials stated.
The slump in exports underscores how the pandemic is affecting global food supply chains, with demand dented by widespread closures of restaurants and transportation of goods stymied by measures to control the virus' spread.
Argentine beef shipments have sky-rocketed in recent years, fuelled especially by demand in China, helping the South American nation boost beef exports to US$3 billion in 2019.
Shipments jumped 50% last year to 845,877 tonnes, with China taking around three-quarters of that, official data show. The EU accounted for 9% of beef exports.
The COVID-19 pandemic, which has seen over a million people infected and caused over 50,000 deaths, has arrested the market, clogging global trade and hurting demand in a hit to Argentina as it grapples with recession and a debt crisis.
"Due to the impact of the pandemic, export markets have cut many of their purchases and are extremely restricted," said Mario Ravettino, president of the ABC consortium of Argentine meat exporters, which represents local meat packers.
Ravettino said that March beef exports to China slumped to around 15% of levels seen late last year, when the South American country was sending around 50,000 tonnes each month to meet consumer demand.
Argentina's exports to China, which rose rapidly last year, had already taken a smaller hit in January when Chinese buyers looked to renegotiate prices, but the impact since from COVID-19 has been much more damaging.
China, where the COVID-19 outbreak first appeared, has been in lockdown since the start of the year with strict quarantine measures that have hit the food service sector and prompted beef demand to plunge.
Argentine meat industry officials said the market in Europe, now at the centre of the pandemic, had seen demand collapse even harder, basically paralysing exports to the region that normally buys pricier cuts of the South American country's beef.
"In Europe practically all restaurants are closed because they are in quarantine and beef in Europe is basically consumed in restaurants," said Miguel Schiariti, director of the Argentine Chamber of Meat Industry and Commerce (CICCRA).
Ravettino echoed the sentiment, "The European Union has disappeared from the market. There are no exports to the EU at this time."
Argentine beef exporters have instead turned back towards the domestic market to keep their plants operating, even if that means thinner profit margins with lower domestic prices.
"We are trying to cope as best we can with the current situation," said Ravettino, adding that activity in local meat packing plants continued as normal for now.