W7 Beef Update: Fluctuating Prices in Uruguayan Meat Exports and Brazilian Diversification Strategies

Published 2024년 2월 23일

In W7 in the beef landscape, Uruguayan meat exports display fluctuating price trends in early 2024, with weekly beef prices witnessing significant variations, reaching USD 4,720/mt in W5, a 22% WoW increase. Concerns arise regarding the accuracy of price reflection amidst past downward corrections. Despite a 35% YoY decline in export volumes in the first 10 days of Feb-24, the year-to-date volume remains 9% higher, propelled by increased exports to the EU, North America, and Israel, while China's share decreases notably. In contrast, Brazilian fresh beef exports in Jan-24 exhibit a slight MoM volume decrease but an annual increase, alongside a stable average price and a 7.9% YoY decline in average value. Despite a slowdown in exports to China, sales to the US, UAE, Türkiye, and Mexico surged, indicating successful diversification efforts to counterbalance market shifts.

Contrasting Price Trends in Uruguayan Meat Exports

Uruguayan meat exports are experiencing contrasting price trends in the early weeks of 2024, as reported by the National Meat Institute (INAC). Weekly export prices for beef exhibited significant fluctuations, with the average price for W5 reaching USD 4,720 per metric ton (mt), according to preliminary data. This represents a 22% week-on-week (WoW) increase compared to the W4’s corrected price of USD 3,878/mt. Past weeks have seen substantial downward corrections in preliminary prices, raising concerns about accurate price reflection within the meat industry. The monthly average stands at USD 3,977/mt, while the annual average is USD 4,012/mt, reflecting a slight 4% year-on-year (YoY) decrease.

Export volumes in the first 10 days of Feb-24 were 35% lower YoY, with declines observed across all markets. Despite the recent dip, the accumulated export volume for the year remains 9% higher YoY, driven by significant YoY increases in exports to the European Union (EU) (+33%), North America (+33%), and Israel (+77%). Notably, China's share in export value and volume has significantly decreased compared to recent years. In the first six weeks of 2024, China accounted for only 38% of the total export value and 44% of the volume, compared to consistently exceeding 55% in previous years. Conversely, North American exports have grown substantially, increasing from 14% and 25% of the total value in 2022 and 2023, respectively, to 31% in 2024. As of February 10, North America has imported 14.3 thousand mt of Uruguayan beef, generating a turnover of USD 61.4 million. The volatile price trends raise concerns about potential market instability.

Brazilian Beef Exports Diversification Mitigates China Slowdown

Fresh Brazilian beef exports in Jan-24 exhibited contrasting trends, marked by a decrease in volume compared to Dec-23 but an annual increase, alongside a slight decline in average value. Export volume decreased by 13% month-on-month (MoM) to 181.7 thousand mt, while the average price remained relatively stable at USD 4,523/mt, representing a 0.5% YoY decline. However, the average export value contracted by 7.9% YoY, indicating potential downward pressure on prices.

Exports to China, the primary destination, declined to 96.3 thousand mt, marking the lowest monthly volume since Jan-23. The average export value to China reached its lowest level since Oct-20 with USD 4,425/mt. This decrease is due to diverting shipments to other markets offering potentially better returns due to declining prices for China. Sales to the United States (US) remained strong, accumulating 18.13 thousand mt, exceeding Dec-23 volumes slightly. This reflects Brazil's efforts to fulfill the US quota of 65 thousand mt, primarily filled by Brazilian and Paraguayan exporters.

Exports to the United Arab Emirates (UAE) and Türkiye witnessed a significant surge, multiplying sevenfold compared to Jan-23. A large portion of these volumes are likely destined for Iran, with the UAE emerging as the third-largest destination in Jan-24, exceeding 10 thousand mt of frozen beef. Mexico also saw notable growth, importing 2.22 thousand mt of chilled and 2.24 thousand mt of frozen beef, positioning itself as the second-largest destination for chilled exports. The strong performance in alternative markets, particularly the US, Türkiye, and the Middle East, demonstrates the potential for mitigating the impact of slowdowns in traditional destinations.