Argentina will export US $1.8 billion of beef this year thanks to Chinese demand and devaluation

The volume of exports of beef from Argentina will double in 2018 and could yield revenues of US $1.8 billion thanks to a growth in Chinese purchases and the devaluation of the currency of the South American country, say industry experts.

If the planned 400,000-tonne floor is reached, the sector would register its largest volume of shipments in the last nine years and confirm the recovery process that it is undergoing, despite the financial crisis that punishes the government of President Mauricio Macri.

Argentina is a historic exporter of bovine meat, but the regulations that the ex-president Cristina Fernandez applied to its commercialization during two mandates, between 2007 and 2015, caused a dramatic drop in the shipments of what is considered a registered trademark international.

According to data provided by industry associations and a market analyst of meat, Argentine exports of meat would end the year at a level of between 400,000 and 470,000 tons, well above the 200,000 tons that, according to official data, were sold last year.

“The Chinese market as head of what is the Southeast Asian block is what has determined this substantial increase in volumes,” Mario Ravettino, president of the Consortium of Argentine Meat Exporters, told Reuters that the country will ship a total of 410,000 tons of the product for US $1.8 billion this year.

According to the Ministry of Agribusiness, between January and July of 2018, China doubled its purchases of Argentine beef to 96,500 tons, which represents half of the total of 184,000 tons of food shipped in that period from the South American country, a total of US $1.027 billion.

In May, China authorized the entry of frozen beef with bone and chilled beef with and without bone from Argentina, when before the South American country could only send frozen meat.

For the president of the Argentine Chamber of Meat Industry and Commerce (CICCRA), Miguel Schiaritti, thanks to the needs of the Asian giant, Argentina’s exports of beef could be around 420,000 tons.

“Competitive dollar“. Argentina is currently going through a financial crisis that includes a fierce devaluation of its currency, which depreciated almost 40% against the dollar so far this year. Although the devaluation aggravated the country’s inflationary process, it benefited some export sectors.

“It’s good for us to have the kind of change we have today, it helps us work in all kinds of exports and in all kinds of markets,” Ravettino said.

“The value that (the exporters) pay per kilo for dollars in dollars, which is what they receive, went down considerably.” In December, it was between US $3.2 and US $3.3 per kilo and today they are at 2.7 “, said Víctor. Tonelli, head of the consultancy Víctor Tonelli & Asociados.

According to Tonelli, exports of beef from Argentina could end the 2018 470,000 tons thanks to the sector has a “competitive dollar.”

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