October 19, 2021

Argentina's pork exports shrink 80% in Q3 2021

 
Argentina's pork exports have contracted 80% in the third quarter of 2021 due to a fall in Chinese demand and a sharp decline in international prices, despite a steady domestic demand.

According to JLU Consultora, Argentine pork exports fell in July, August and September by 83.23%, from 14,033 tonnes in 2020 to 2,354 tonnes.

This abrupt drop caused shipments to fall from 31,891 tonnes exported in 2020 to 28,468 tonnes in the first nine months of 2021.It is expected that this year will end with the first drop in exports since Argentina began to trade pork abroad in 2017.

Former Argentine Association of Swine Producers president Juan Uccelli told Télam that shipments will end in 2021 with a volume of 35,000 tonnes (7,000 tonnes less than in 2020) when it was expected to reach a record 60,000 tonnes.

Uccelli explained that this decline was due to a drop in Chinese demand, which accounts for 80% of total Argentine exports, coupled with a sharp drop in international prices. The rise in the price of corn and soybeans, the main food for pigs, caused a large number of Chinese producers to leave the market due to the losses caused by the increase in costs, Uccelli pointed out.

Guillermo Proietto, general manager of the Argenpork export consortium, explained that "during the first semester, what was happening in China is that the price of live pork began to drop locally due to a significant recovery in production" and "some outbreaks of African swine fever made producers rush to liquidate production, added to a point in the year that is not of high demand for pork in that country. That caused the price to fall and ended up causing the production to stop exports, as the price collapsed by almost 50%," Proietto explained.

In addition to these factors, "in August, it was expected that China would resume purchases, but at the end of July, an important Chinese and Brazilian broker filed for bankruptcy and caused a very serious problem for the sector since it left many unpaid containers in China or on the way to that destination loaded with pork," Uccelli explained.

While international prices fell, Argentina's domestic live pig market recovered.

- MercoPress