MercoPress. South Atlantic News Agency

Uruguay trying to lessen dependence on China for its beef exports

North America, mainly US, has been the main destination of Uruguayan beef in the first half of this year, ahead of China

Uruguay is committed to lessen its dependence on the Chinese market for its sales of meat and beef in particular. In recent years China, as with most other Latin American countries has become its main trade partner, absorbing non processed agricultural commodities and minerals while flooding local economies with Chinese industrial goods.

 Uruguay has been no exception and its top quality beef has been exposed to the buyers lower prices purchases, be it because of a slowing Chinese economy and probably consumption, but faced with this situation Uruguayan authorities and private sector are promoting exports to other markets such as North America.

The retraction of Chinese demand and prices seems to be similar to what is happening with Brazil, Australia and New Zealand, with the exception of Argentina, where most probably Beijing is interested in recovering the many billions of dollars it has invested in that country with previous governments.

According to official data from Uruguay's National Meat Institute, INAC, between January and August 10 of this year, Uruguay’s beef exports—which accounted for 81% of the total revenue from all meat exports—reached US$ 1.223 billion, a slight increase of 0.1% compared to the same period last year. In terms of volume, beef exports rose by 7.1%, reaching 299.95 thousand tons, .however, the average price of Uruguayan beef fell by 11%compared to the same period in 2023, standing at US$4,079 per ton.

 Anyhow the big news this year is that China is no longer the leading revenue source for Uruguayan beef exporters, according to INAC. The Asian giant has been overtaken by the North American bloc, with the United States playing a major role (Canada and Mexico made marginal purchases of Uruguayan beef). As of August 10, the U.S., Canada, and Mexico accounted for 32% of Uruguay’s total beef export revenue, totaling US$ 390.8 million for the sale of 97,375 tons, according to INAC.

China trailed with a 30% share, totaling US$ 371.5 million from 115,324 tons. The European Union ranked third, with 16% of purchases worth US$ 196.1 million (27,736 tons). Israel and Mercosur took fourth and fifth place, generating US$ 69.8 million (15,077 tons) and US$ 61.6 million (9,644 tons).

Other markets include Japan with US$ 24.8 million and 6.270 tones; UK with US$ 23.4 million and 3.555 tons, finally Russia US$ 22.3 million and 10.941 tons.

But despite a not so encouraging first semester, the US Department of Agriculture, USDA, is forecasting a better market response from China in the second half of the year. The increase in Chinese demand is estimated in 1,3%, the lowest in the last decade, but any how meat imports should increase from 3.9 million to 3,95 million.

USDA argues that a tepid consumer demand increase can be excepted in China, but local production and considerable stocks in storage from the previous year will be influencing the consumer market also. Overall domestic meat production in China this year could end 250.000 tons above 2023.