A work prepared by the economists of the Mediterranean Foundation, Juan Manuel Garzón and Nicolas Torre, Maintains thatChina is consolidated as a large meat importer, and it becomes good news for the exporting sector of Argentina, especially for beef, where last year our country exported to this market 425 thousand tons, which meant 20% of the total production, and generating foreign exchange for 2,065 million dollars.
The work focuses the analysis on different aspects related to the animal protein market in China, with special attention to the impact of coronavirus and African swine fever, on the levels of production, consumption and imports of meat from the Asian giant. Economists argue that “If China manages to overcome with relative success the coronavirus and the global economic crisis, as it is happening, it is feasible that these shipments not only continue this year, but also end up expanding”they explained.
Projections They position imports of all meats by China, going from 7,200,000 tons in 2017 to about 11,800,000 tons this year, which would mean a 64% increase in just 3 years. The largest purchases would be concentrated in beef and pork, which would be more than doubling in the period, going from 2.4 to 6.4 million tonnes of bone-in beef equivalents (+2.3 million and +1.6 million , respectively). In per capita terms, total imports would be rising from 5.2 kilos to 8.4 kilos in this three-year period.
“As can be deduced, the great acceleration of imports has modified the structure of China’s meat supply, increasing the dependence of its internal market on the production of other countries,” commented the economists, adding that the projections of the Department of Agriculture The United States reflects that this year the Asian giant would import 26% of the beef it will consume, 10% of pork and 5% of poultry. This is the highest percentages in recent years in all cases.
The work of the economists of the Mediterranean Foundation also showed the impact that African swine fever has been having in China, where According to the United States Department of Agriculture (USDA), some 20 million tons of pork production would have been lost, a flow that represents approximately 15% of China’s total production of animal protein, including the 4 leading meats. , bovine, porcine, avian, ovine and fish.
The economists of the Mediterranean Foundations commented that based on this situation, China could go three ways:
– The first was to rapidly increase the production of other meats, a strategy that has its limitations and is only feasible in intensive and short-cycle productions; At the moment what is being seen is a significant increase in Chinese poultry meat production, which would be growing 33% between 2017 and 2020, by almost 4 million tons at the end of the period.
– The second way was to reallocate meat that was being exported to the domestic market; in China, the only production with surpluses of magnitude is that of fish, with 8.2 million tons exported in 2018, and there is indeed a drop in these shipments, of around 600 thousand tons a year in the period (projections of OECD / FAO).
– Finally, the third way was to go to the global market in search of the missing products, something that it has also been doing and with a great appetite since the beginning of 2019 and where of course the main interest for Argentina resides.
According to Garzón y Torre, the appearance of the coronavirus at the beginning of this year, “cast doubt on the continued expansion of Chinese meat imports. Fortunately, these questions are being left behind after knowing the imported volumes in the last two months, surprisingly high, much higher than in previous months and also at 2019 levels.
In this sense, last March the purchases made under the heading “meat and offal” totaled 919 thousand tons, 50% more than in the previous months and in April they also remained at a very high level, with 862 thousand tons. Chinese customs includes in this group all meats (bovine, avian, porcine and ovine) and offal.
The contribution made by economists reflects that The purchases of the first months of the year are ratifying the expansionary scenarios for 2020 that different international organizations, such as the United States Department of Agriculture, propose. In the first quarter, beef imports were 65% above the same period in 2019, pork meat + 183%, poultry meat + 97%, and sheep meat + 1.3%. “All these percentages are much higher than the variations that, for example, the USDA expects for the whole year (+ 15% in beef, + 57% in pork, + 25% in poultry),” they commented.
With regard to Argentina, and according to Chinese Customs records, last March the meat purchases made by the Asian giant reached 62,700 tons of product weight. It is the highest volume in trade history with that country. Shipments were mainly bovine meat (84%), although the flow of poultry meat (15%) was also important. On the other hand, there were no records of purchases of sheep meat but of pig meat (less than 1000 tons, 1% of total shipments).
A fact that Argentina should take into account is the advance of Brazil in the beef market, with a participation that is reaching 40% in March, the highest in recent years. On the contrary, Uruguay, with a smaller supply and therefore limited to satisfy the enormous Chinese demand, has been losing its share, having had 30% of the market recently, currently stands at 13%.
Lastly, the Fundación Mediterránea economists expressed: “Argentina’s challenge is to remain competitive in this market (price, quality, logistics, etc.) in a context of great global players and that internal policies, particularly commercial ones, also accompany It is seen by case that this year Brazil is showing a great acceleration in its shipments of all meats and another major business, the United States, is also starting to appear in Asian statistics, particularly in the pork market. ”
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