US Beef Exports Surpass China as Trade Dynamics Shift: Analysis by Rosgan

But, At the same time that Chinese demand seems to be declining – at least temporarily – the United States continues to increase its participation with a significant increase in its external supply (+ 203 thousand tons) because the initial recovery of local production would not be enough to cope with the expected growth in domestic consumption. In this context, US imports are expected to represent 15% of global beef trade, up from 14% in 2023 and this will more than offset the decline in imports beef trade from China.

Undoubtedly, this situation will shift the global trade map in some way, especially challenging those exporters who are more familiar with China and less diversified in other markets .

a long time ago, We showed the level of exposure of our beef exports to the fluctuations in the Chinese market. In that report we showed that Argentina, within the region, is the most open source for this market, reaching participation levels in 2023 of up to 80% of total shipments against an average of 60% and 55% for Brazil and Uruguay.

In these first three months of the year, The total export of the region – considering Brazil, Argentina, Uruguay and Paraguay – was around 853 thousand tons of product weight, which represents an increase of 21%. compared to the 705 thousand tons exported in the same quarter of 2023.

However, when analyzing the opening by origin, these growth rates correspond mainly to Brazil and Argentina, with year-on-year increases of 28% and 23%, respectively , therefore, the source with the largest number directed to the Chinese. market.

Surprisingly, in these first three months of the year, both countries have increased the number of sales to China, although unlike Brazil, which slightly decreased exposure to this market from 56% to 52% from one year to the next, Argentina again. collecting 75% of its sales in this destination compared to the 73% recorded in the same period, a year ago. According to data reported by INDEC – already discounting the products related to bones with meat – from January to March of this year, Argentina exported a total of 164,932 tons of product weight, of which 123,495 tons went to China, generating an income of $405. million.

Although it is in volume he The Chinese market continued to grow In those first months of the year, increasing purchases by more than 27%, in value, the average paid per ton of products shipped was 13% lower than the registered a year ago, ranging from an average of 3,785 to 3,287 dollars per ton for the quarter.

In fact, official data provided by the Chinese Customs Administration show that the average value paid last year for each ton imported from all sources registered a drop of 21%, going from an average of $ 6,600 in 2022 to less than USD 5,200 per ton in 2023, and, for the first quarter of 2024, the changes continue to show a year-on-year drop year of 10%, averaging around USD 4,800 per ton.

Although, for Argentina, The greater number of purchases that the sales statistics continue to show for this destination so far compensates for the drop in prices, maintaining the level of billing, If the change in movement that the USDA predicts for this year is determined by a reduction of 4% per year purchased and excluding the amounts paid up to this, our beef sales to China could report 16% less in foreign exchange income.

Source: Rosgan.