October 13, 2008

Argentina's beef exports have halted as buyers leave the market due to the world financial crisis, according to an executive from a meat exporter.

As global commodity prices fall sharply on growing expectations of worldwide economy slowdown, beef importers are unhappy at the high prices they have had to pay over the past months.

Buyers from the EU and Chile offer 30-percent and 40-percent less, respectively, while Russia made no offers due to high domestic stocks and falling demand, the executive said.

Beef exports during the first eight months of 2008 totalled 230,095 tonnes, down 22 percent on-year, and much lower than the official export quota of 360,000 tonnes for the period, according to official figures.

Export values so far this year reached just under US$1 billion, down from US$1.5 billion in the first eight months of 2007. Reduced buying capacity also plays a part, as the dollar gains ground against most of the world currencies; Argentina's beef sales are priced in dollars and the peso has stayed firm in relation to the US currency.

In May, the government announced a new policy in which exporters have to declare their total production capacity and are allowed to export only 25 percent of that amount, with the rest going to the domestic market in an effort to moderate prices.

Argentina is the world's fourth largest beef exporter behind Brazil, Australia and India, but export limits are seen to be shrinking the country's global market share.