Crisis in Uruguayan meat packing plants due to the sector's debt, which is at its highest level of the year

Published Sep 13, 2024

Tridge summary

The Uruguayan meat industry is currently facing its worst financial crisis in recent years, as highlighted by a 3% monthly increase in debt from the financial system in July, reaching a yearly high. Despite a 21% decrease in total credits over the year, delinquency has surged, with overdue credits reaching $9.64 million in July, which is 90% higher than the same period last year. This crisis is largely attributed to a decline in Chinese demand, a significant customer of the Uruguayan meat industry, leading to increased unemployment and reduced work in meat processing plants. Additionally, the industry's poor performance is also linked to the low volume of slaughter, with only a few plants remaining operational throughout the year, resulting in periods of low activity and increased reliance on unemployment insurance.

Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The meat industry's debt with the financial system registered a monthly increase of 3% in July and thus reached its highest level so far this year, according to the latest data from the Central Bank of Uruguay (BCU), reflecting the difficult moment that the sector is going through. The meat industry is in crisis, and this can be seen not so much in the credit levels of the sector, but in the delinquency. In fact, in annual terms, total credits fell by 21%; however, the delinquency in the last two months was the highest since August 2021, as reported by Blasina y Asociados. Thus, in July, overdue credits totaled 9.64 million dollars, slightly below June, but 90% above the 5 million dollars of a year ago. Likewise, while the average of total credits between May and July was 311.7 million dollars, 21% below the average of 396 million in the same period last year; overdue credits averaged 9.2 million dollars, a significant difference compared to the average of 4.76 million dollars ...

Source: Agromeat