The price of beef in Argentina has soared, one of the reasons being that the demand for meat from the Chinese, who have changed their diet, has greatly exceeded the entire industry’s predictions. The authorities in Buenos Aires decided to suspend beef exports for 30 days in order to reorganize prices in the domestic market. On the international market, beef prices are thus bullish.
Argentina’s beef prices soared and the entire population suffered. As a major South American agricultural country, Argentina is also the world’s largest per capita consumer of beef, however, in terms of total consumption, it is the Chinese who lead the global beef market.
The latest report by Marie-Pierre Olphand in the “Chronique des matières premières” column of RFI France on Wednesday, May 19, 2021, describes the 30-day suspension of beef exports from Argentina The Argentine government explained that this is a temporary measure to regulate prices in the domestic market.
The Argentine government explains that this is a temporary measure. But even so, it has caused negative reactions among meat producers who benefit from the current high export prices. The Argentine Rural Federation also immediately commented that this was a step backwards in the development and growth of the livestock industry.
Local beef prices in Argentina have jumped over the course of the year. And meat is a staple in Argentina: per capita consumption is between 40 kg and 50 kg per year. And the average consumption in Europe is 14 kilograms. Against the backdrop of an already quite difficult local economy, the cost of living has increased by 46% in the last 12 months. If the price of meat increases, daily life will soon cause problems and become the cause of potential discontent. The decision of the authorities did not surprise those who know the Argentine state. One of them explained that Argentina (implements) a system of export tariffs that alternates between open and closed.
China leads the meat market
Argentine President Alberto Fernandez said that the soaring prices of Argentine beef are not “unexplained”. The main reason is the good appetite of Chinese eaters. China now consumes a quarter of the world’s beef. An economist specializing in meat markets, Simier (Jean-Paul Simier) admits that the Chinese have been in the international meat market for more than a decade, but never imagined that Beijing would cause the meat market to dry up.
The Chinese buy everything: pork, beef, lamb and poultry. This is not only a reaction to a change in diet, but also the result of repeated health incidents: bird flu and swine fever. In recent years, the number of livestock stocked in China has been drastically reduced. Meat from South America that was destined for Europe is now mainly being diverted to Asia.
International prices may be going up
Faced with incredible Chinese demand, Argentine meat exports have been increasing in recent years, with China accounting for 80% of the total. However, local production has remained almost stable, especially due to the increase in soybean acreage, which has reduced the amount of land available for pasture. With less product available, the supply of the local market is tightened.
The measures taken by the authorities are supposed to rebalance the supply and demand in the domestic market and will benefit the wallets of the Argentine population, although it is still difficult to say the exact percentage. The expert Simier (Jean-Paul Simier) added that there should be an inflationary effect in international prices because, for a month, the largest supplier of China will leave the market.
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