Argentina Beef Export Ban Impact on Global Market

23 June 2021
Argentina Export Data

Argentina put a 30-day beef export ban, a measure to contain the sustained increase in the price of bovine products in the domestic market and to operate the industry. Argentina shipped meat of frozen bovine animals worth USD 2,063 million in 2020, while exports of meat of fresh or chilled bovine animals totaled USD 653 million. According to Export Genius Argentina export data, Argentina’s top beef export destination is China, which shared 83.1% value to total exports. How Argentina beef export ban will impact global market, especially China? Let’s understand from Argentina export statistics available.


The temporary ban of meat exports marked an exception for the Hilton Quota and the 481 Quota of the European Union and the United States market. This means all exports feel into those two quotas are destined to the US market are clear from the ban. However, meat exports to China, which is Argentina’s largest market, will be affected.


Impact on the Chinese Beef Market


Meat consumption in China has rapidly increased in recent years, driven by higher disposable income, improved standard of living and the rapid expansion of middle-income consumers. In China, the decision of Argentina beef export ban will be a big concern as the country is facing a scarce supply of meat and high values. China accounts about 35% beef imports globally and since 2016, it is the world’s largest importer of beef. Also, China is Argentina’s top-most export destination of beef, with a share of whopping 80%.


According to China import data, Brazil and Argentina are the largest suppliers of beef to China, as they together accounted for more than 60% value to total value of shipments in 2020. Here is a visualization of percentage share of China’s top 10 beef import partners reported in 2020.



Country

Value USD %

Brazil

42.7

Argentina

21.2

Australia

12.4

Uruguay

8.6

New Zealand

8

United States

1.9

Chile

0.9

Canada

0.7

Costa Rica

0.6

Bolivia

0.5

 


Impact on US Beef Exports


The Argentinian export ban on beef may directly affect other main beef suppliers such as the United States and New Zealand, which have been steady suppliers of beef to China over the years. The U.S. has already significantly increasing its beef exports in 2021, after a 12% decline last year due to Covid-19 pandemic restrictions.


While Argentina is not the top beef exporters in the world, and this ban is only for 30 days, the country is a key source of product for China. The ban is expected to increase global prices of beef. With the U.S. already experiencing an increase in beef prices and along with very high demand, it is likely that the United States will take an advantage of the situation and beef exporters will increase shipments in coming months. 


Argentina’s Top 10 Beef Export Destinations 2020


China is Argentina’s biggest market of beef. In 2020, Argentina exported beef worth USD 1,715 million to China. Here is a list of Argentina’s top 10 beef export destinations reported in 2020.



Country

Value USD %

China

83.1

Israel

6.3

United States

3.9

Brazil

2.3

Russia

2.1

Germany

0.4

Netherlands

0.3

Italy

0.2

Hong Kong

0.1

Peru

0.1

 


Reasons for the Argentina Beef Export Ban


The Government of Argentina announced a beef export ban for a period of 30 days. Why ban? The officials stated the following reasons:


           ·         To protect the domestic price of bovine products.

           ·         To set up emergency measures that seek to order operation of industry.

           ·         To optimize traceability of exports, restrict speculative practices.


Will ban end after 30 days? Although Argentina has announced beef export ban for 30 days only, history has shown previous examples of the country’s attempt to control domestic prices by banning exports have gone on for much longer, in one example, more than a year.

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