Uruguay displaces Argentina as second largest supplier of beef to China

RIO DE JANEIRO, BRAZIL – According to Juan Manuel Garzón, Argentina’s share of this market’s demand fell from 23% to 11%; Uruguay increased its share from 11% to 14%. In Brazil, the share increased from 40% to 46%.

From June to September last year, Argentine beef exports decreased by 16.5% compared to January-May 2021. It should be recalled that on May 20 this year, the beginning of the current cycle of restrictions on foreign sales was officially announced.

While Argentina recorded a decrease, competitors increased their exports: Brazil by 41.6%, Uruguay by 22.9%, and the United States by 6.2%.

The data was released by Juan Manuel Garzón, an economist at the Mediterranean Foundation Ieral in Argentina. He also pointed out that Uruguay overtook Argentina in sales to China last September and relegated Brazil to third place.

“While last year Argentina was the second meat supplier to this Asian country with 23%, behind Brazil with 40%, last September it was third with only 11% and was overtaken by Uruguay (which had only 11% in 2020) with 14% of the Chinese market,” Garzón told La Nacion newspaper.

In analyzing the factors that may have led Argentina to reduce its meat exports, the economist must first look for external reasons. This exercise leads to a surprise.

“There could have been a drop in foreign demand, for example, from China. However, if you look at competing countries and see that they continue to have good growth, you automatically rule out the demand factor and have to look at internal factors,” he explained.

In this regard, he explained that Argentine exports of the product had shown some growth in the last four years, but in June, there was a change, and everything slowed down, “They started to restrict volumes, and we started self-restraint. We went from a free trade system to a trading system that is managed and regulated by the government.”

“In the current context, we are at 65,000/70,000 tons of carcasses, and we should be at 95,000/100,000 tons. With a demanding external market like China, we should be at least 20% higher than last year. Our meat is easily replaceable at present. What we have lost, Uruguay, Brazil, and even the United States have gained,” he added.

Garzón described, “We used to play the game with 11 players and a neutral referee, but now that referee (the government) has a lot of influence deciding how many players can play and how they should do it. It has become just another game, very uncertain and very discreet.”

“In addition to the market risk that all companies always have, there is an institutional risk. There are hardly any countries left in the world where there is such a risk, except the former Soviet Union, some countries in Africa and Asia, but none in the developed world,” he said.

With information from La Nacion

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error