Russia-Ukraine Conflict Likely to Bring Colombia’s Beef Exports Down From 2021 Record Levels

Published 2022년 3월 2일

2021 was a record year for Colombian beef exports, when 56,790 mt worth USD 248 million was shipped abroad. Russia, their main beef trading partner with an export share of 28%, is severely affected by the Russian currency depreciation, sanctions and suspended logistic operations.

Colombia’s beef exports

In 2021, Colombia’s beef exports totaled 56,790 mt representing a value of USD 247.7 million data from Federación Colombiana de Ganadero show. In 2020 the exported volume was 34,124 mt with a total value of USD 123.3 million, meaning that the growth in 2021 was 22,666 mt(40%) and USD 124 million (50.2%) YoY. Export volumes peaked in August, where 6,517 mt of beef were shipped abroad.

The most popular meat cuts of beef in international markets were frozen forequarters with 21,971 mt (USD 88.9 million, 36%); cuts of chilled hindquarters, 8,559 mt (USD 45.4 million, 18%); forequarter cuts refrigerated, 8,280 mt (USD 39.8 million, 16%); and lean cuts of beef, fresh, chilled and boneless, 2,598 mt (USD 15.7 million, 6%).

There are five countries that collectively share 77% of the total export volume of Colombian beef exports with Russia possessing the biggest share at 28% followed by Chile (16%), Egypt (15%), Libanon (10%) and Hong Kong (9%).

The increase in exports is in part a result of the general boom in the cattle industry in Colombia, where livestock breeding has been reactivated and the combined value of meat and live animals reached USD 399 million in 2021, up 49.9% YoY from USD 267.1 million in 2020. Along with dairy products, which totaled USD 28.1 million in 2021, it is the hope of the sector that the combined value of exports for meat, dairy and live animals will reach USD 500 million in 2022.

Export target threatened by Russia-Ukraine conflict

The hopes of continued export growth is partially grounded in the expectations of recovery of the industries post Covid-19 and improvement of the international logistics challenges will increase demand and smoothen trade flows. However, the ongoing conflict between Russia and Ukraine may well burst the hopes of Columbian exporters since a substantial part of the fertilizers used in Colombian agriculture is sourced from these two countries. In the case of Urea fertilizer, a widely applied fertilizer and animal feed additive in Colombia, 29% is imported from Russia and 13% from Ukraine. As a countermeasure, the Colombian government cut all tariffs on imports of 270 agricultural inputs.

Moreover, the Russian ruble is falling dramatically against the U.S. dollar, reaching 0.0094 on 2 March - a 21.6% decrease since the 27 February, which will inevitably affect the purchasing power of Russian importers and retail customers. Colombia’s beef exports are expected to be affected as well, as shipping companies are suspending transports to Russia and international sanctions are applied to Russia’s foreign currency assets. To maintain the growth of Colombia’s beef exports in 2022, Colombia will have to seek new markets.