Argentina Set to Reopen Beef Exports

Published 2021년 6월 22일

Argentina is set to restart beef exports following a one-month ban. The country has negotiated a deal with meatpackers to facilitate reopening the country’s beef exports. The government is expected to announce the agreement before the end of June 2021. Surging domestic food prices led to Argentina ceasing exports for a month in mid-May 2021. The country is the fifth-largest global beef exporter and a key supplier to China. However, Argentinian meatpackers have negotiated a way to lift the ban to avoid it getting extended.

High prices cripple the domestic market

Agricultural exports account for a large portion of foreign spending in Argentina. According to Indec, an Argentine statistics agency, Argentina exported USD 3.37B of beef and cow leather in 2020, a 16.5% decrease from 2019. However, exports have increased in 2021 due to increased demand from China. During the first four months of 2021, 28.8% of the 965,286 tonnes of beef produced in Argentina were shipped out of the country, with 76.6% going to China. Argentina is the second-largest beef exporter to China, behind Brazil.

Beef prices have been rising globally due to China importing more beef, and increased grain prices are pushing feed costs higher. The high beef prices have severely hurt the Argentine domestic market and caused beef prices to spike. In the 12 months through April 2021, meat prices rose by 72.9%, significantly more than the general variation in prices of 48.8%. As a result, inflation in the country is also expected to reach 50% this year. According to the United Nations food agency, this price dynamic has contributed to the highest food prices globally since 2014, affecting poorer consumers more as they recover from the effects of COVID-19. To curb the rise in beef prices and to safeguard the domestic market, the Argentine government placed a ban on beef exports from May 20, 2021, for a month.

Since the ban was placed, Argentine beef packers began negotiating with the government to remove the restrictions, fearing an extension of the ban. The export ban was rejected by agricultural producers who protested by not sending live cattle to the largest livestock market in Argentina for two weeks. The lifting of the ban is expected to allow the partial reopening of beef exports while guaranteeing adequate domestic supply. A preliminary agreement is in place regarding the amount of beef to be exported based on negotiations between the government and meatpackers.

Production set to rise

According to the Argentine Chamber of Meat Industry and Trade, as of 2021, Argentines consume an average of 49.2 kgs of beef per person yearly, compared with the 2009 peak of 69.3 kgs on average. Argentina is a leading global consumer of beef per inhabitant, with 45 kgs per year. In turn, it is the fifth-largest producer and fourth-largest global exporter of beef. The government has increased beef production in recent years, with the trend set to continue in 2021 due to increased demand from China. Beef exports in 2020 reached a value of USD2,7B, with most of it being exported to China.