RIO DE JANEIRO, BRAZIL – The latest data show that the decision taken by the Argentine President Alberto Fernández government to restrict beef exports, is failing to produce a positive effect on the sector and the country.
There is a sharp drop in prices received by producers, less activity in the exporting meat processing industry and consequently a drop in workers’ income, a drop in dollar revenues from exports and a steadily rising price of beef.
Moreover, competing countries are replacing Argentina’s position in the foreign market. Such is the case of Paraguay and Uruguay.
According to data released by the National Service of Animal Quality and Health (SENACSA), in the first 7 months this year, Paraguay’s beef exports reached 211,650 tons and a value of US$988 million – a record.
Meanwhile, 225,000 head of cattle were slaughtered. The report also detailed that the main beef export markets (in kilos) were Chile with over 83.6 million, Russia with 52 million, Brazil with 19 million, China (Taiwan) with 18.5 million, Israel with 13.5 million and Uruguay with 4.1 million.
“Beef is the star and is consolidated as the country’s brand product, with revenues of over US$700 million, including giblets. The prospects are better given the restrictions imposed by Argentina on its exports by the government of Alberto Fernández,” Paraguay media stated.
Furthermore, Chile is an example of the rise in Paraguayan meat exports: in this market it is now positioned as a premium product, it is number one in the imported meat segment, and is placing more orders in response to this regional situation.
According to data published last Monday by Uruguay XXI, the agency responsible for promoting exports, total exports excluding free trade zones increased by almost 51% in July, with revenues of US$924 million. Considering sales in free trade zones, Uruguay’s global sales reached US$1,068 million and increased by 58.7% year-on-year.
The main product traded to the world was beef amid strong demand from China. Sales grew by 80% year-on-year, with revenues of US$231 million, the highest figure for July in the past 20 years. “The increase was due to higher exported volumes (54%) and also to the increase in the export price (17%), in a context of lower meat supply worldwide, while demand remains strong,” said the Uruguay XXI report.
The situation in Argentina
While Paraguay and Uruguay increase their beef exports, in Argentina the quota system is still in force until August 31, with the country exporting an average of 50% of what it sold to the world in the second half of last year.
In recent weeks, the government made a commitment to the cattle and meat sector to relax exports. This has not yet materialized, and now officials are setting conditions. At the start of this week Minister of Productive Development Matías Kulfas said that export quotas would be released provided that price stability in the domestic market continues.
“Our goal is to stabilize the price of meat, which increased in a completely unjustified way due to speculative practices by some exporters involved in illegal practices, such as under-invoicing exports to evade taxes. We have been working to reorganize the sector because our goal is to ensure that the domestic market is well supplied and that we may also export, but this must be achieved in an orderly way. Now the price of meat has stabilized, in fact a slight drop has been observed. We will be releasing export quotas provided we see that the domestic market remains stable,” the Minister stated.
There is growing uneasiness among producers. After the last July 9 demonstration in the city of San Nicolás, Buenos Aires, organizers will meet next Monday at 11 AM in Bell Ville, province of Córdoba, to agree on the next measures to be followed as so far there have been no answers to the manifesto drafted in the rally and submitted to the different structures of the State.
The Mesa de Enlace (the sector’s coordinating Liaison Table) was invited to the meeting in Bell Ville to be held under strict compliance with health protocols. The leaders have yet to confirm their presence.