Argentina has announced a snap 30-day ban on all beef exports and the decision is set have ramifications for the trade globally.
- The Argentinian government is attempting to lower local beef prices with 30-day export ban
- One analyst believes ban will put a lot of pressure on China
- Argentina exported about 750,000 metric tonnes of beef in 2020, the bulk of which went to China
One of the world’s biggest beef exporters, Argentina moved about $US3 billion worth of product in 2020, mostly to China.
Independent analyst Simon Quilty, said the ban appeared to be driven by upcoming national elections and a desire to lower domestic meat prices.
“[Argentina has] had soaring beef prices as well as inflation … so the government is feeling the pressure and there’s a need to try and win back the voter,” he said.
President Alberto Fernandez reportedly told a beef export association that “emergency measures” would be developed for the sector.
“The president expressed his concern over the sustained growth in domestic beef prices over the last few months,” according to a statement reported by Bloomberg.
Who will fill the void?
Argentina exported about 750,000 metric tonnes of beef last year, 68 per cent of which went to China.
“[China] is their single largest market — in the month of March, they made up 22 per cent of that market share,” Mr Quilty said.
“Without Argentina participating in exports to China, we can expect a quick response by China – which will be really needing meat, beef in particular – and I expect a spike in enquiries and prices into China as a result of this.”
When asked which nations were best-placed to fill the gap, Mr Quilty said China would face a “real challenge”.
“Brazil’s exports are down dramatically, Australian beef exports are down, they will look to North America, but they won’t be able to buy cheap, lean beef [from the US],” he said.
Mr Quilty said Argentina had form with such announcements, including a 15-day ban in 2014, which he argued did not achieve much.
But he said global beef supplies were already tight and this announcement would have significant ramifications.
“I expect there’s going to be a genuine shortage of lean beef globally for the next 12 to 24 months,” he said.