China is buying less meat from Argentina and Uruguay

Uruguayan meat exports to China fell in September for the third consecutive month in the year-on-year comparison, according to data released by the Uruguay XXI Institute, the government office focused on foreign trade.

In an international context where a slowdown is expected in the Asian giant, South American countries focused on this market are beginning to see warning lights since a drop in meat placements from Argentina to China is also expected.

“The Chinese market is not complicated; it has collapsed,” said Mario Ravettino, president of the Consortium of Argentine Meat Exporters (ABC), during a presentation to journalists, according to El Cronista.

The businessman also stated that he did not know if the shipped merchandise would be unloaded at the same price or if it would be reduced.

According to Infobae, so far this year, Argentina has been exporting an average of 80,000 tons of meat per month, but by October, they are expected to be around 60,000, influenced by the fall of China but also by the European Union, said meat market analyst Mario Jairala.

A context of deceleration: China’s GDP fell by 2.6% in the second quarter against the previous period, after growing by 1.4% in the first three months of 2022.

CHINA, A KEY MARKET FOR MEAT FROM URUGUAY, ARGENTINA, AND BRAZIL

In Uruguay, beef exports fell by 23% year-on-year in September. China accounted for 57% of total placements of this product, and, counting that market alone, the year-on-year decline was 34% in the ninth month of the year.

The European Union also reduced its purchases of Uruguayan beef in September by 32%.

China had already reduced its beef purchases from Uruguay in August by 26% in the year-on-year comparison and had also fallen in July.

In Brazil, at least until August, China’s demand for meat was maintained.

HOW MUCH MEAT DOES URUGUAY EXPORT?

Uruguay closed 2021 with more than 550,000 tons of meat exported, for a total of US$2.4 billion.

In 2021, China was the main market for Uruguayan exports of goods, with 28% of total placements.

But the ascendancy is greater only when counting meat, and accounted for 60% of exports of the product the previous year.

According to El Cronista, in terms of volume, China is the destination of three out of every four kilos exported.

China accounts for 77% of Argentina’s total exports, although in August, there was already a 16% drop in volume and a 6% drop in price.

At the end of September, before the latest export data are known, but already with the falls of August and July, Bloomberg Línea consulted the president of the Rural Association of Uruguay, Gonzalo Valdés, about the lower demand of the leading trading partner for Uruguayan producers.

“We are going to wait a few days to see if there will be more supply now that spring is coming in, and those prices will increase again or at least to values like the ones we had been.

“The truth is that now we are a little bit in expectation. It is a time to wait and see,” said the producer.

With information from Bloomberg