Paraguay Continues to Seek New Export Markets for Its Beef As Exports to Russia Decline

Published Apr 21, 2023

After a decline in exports to Russia, which was Paraguay’s second-largest export market in 2022, the South American country continues to seek new markets for its beef, with expectations to begin exporting to the US in upcoming months. Canada, South Korea, Japan, and Singapore are other possible markets into which Paraguayan beef could enter soon.

Paraguay is looking for new markets to export its beef to, since it faced uncertainty in its second-largest export market, Russia.

Paraguay started facing some problems with its exports to Russia with the start of the Russia-Ukraine conflict and the sanctions that the US and the EU imposed on that country. The suspension of the SWIFT payment system in Russia made payments difficult to Paraguayan exporters. In addition, Russia suspended imports from several Paraguayan plants on sanitary grounds in September of 2022, to which the Paraguayans said there was no basis.

In 2022, Paraguay exported a new record of 333.7 thousand mt of beef with a total worth of USD 1.72 billion according to SENACSA data. Exports to Russia accounted for 18.5% in volume and 14.5% in value, and it remained the second largest export market for Paraguay in terms of both volume and value. Nonetheless, the volume exported to that country declined by 22%, while the exported value fell by 20%. In January-February 2023, exports to Russia plummeted further by 53% YoY in volume (at 4.48 thousand mt) and 55% YoY in value (at USD 16.35 million). While in volume it remained at the second spot, Russia now trails Brazil and Taiwan among the top export markets in value, in addition to Chile, which remained in the top spot.

Source: Tridge and SENACSA

As a result of the losses in its Russian market, Paraguay is seeking to diversify its exports to other large beef importers. The new markets that Paraguay is looking into include the US, Canada, South Korea, Japan, and Singapore, which will likely carry higher prices.

The market in the US could be opened to Paraguay beef after the period for comments in a proposal launched by the USDA is set to finish this May.

On March 27, 2023, the USDA proposed a rule that could allow imports of fresh or frozen beef from Paraguay. The USDA determined that "fresh beef can safely be imported from Paraguay", under some conditions. The proposal allows for comments until May 26 of this year.

The US hadn't allowed beef import from Paraguay as the country's cattle had suffered Foot and Mouth Disease in previous years. However, it recently released the proposal after conducting a risk analysis, which concluded that the risk was low. The regulatory measures to be implemented for Paraguay-origin imports are the same as those applied to Argentina's and Brazil's exporting regions.

In the details of their proposal, the USDA mentioned it was expecting a change in the market shares of the US beef import origins with the entry of Paraguay. For now, the expected market share gain of Paraguay would be 0.05% of the US average annual imports.

The USDA's economic analysis concluded that the gains of consumer's welfare will more than offset the losses in producer's welfare with the introduction of Paraguayan beef.

Meanwhile, Canada conducted an audit on Paraguayan beef conditions in late 2022. In late March, local reports mentioned that Paraguayan authorities had received the official report from Canadian authorities, initiating a 60-day period for an official response to some observations, but overall satisfactory in its conclusions. It is expected that Canada will approve the imports of Paraguay beef.

Meanwhile, Paraguay continues in talks with South Korea and Japan for the opening of their markets according to SENACSA. However, the process could still take years in the case of Japan.