Supply Chain

Argentina Beef Shipments To EU, China Stall Amid Virus

By Dayeeta Das
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Argentina Beef Shipments To EU, China Stall Amid Virus

Shipments of beef from Argentina's famed cattle ranches to the European Union have plunged to almost zero amid the global coronavirus outbreak, while sales to top buyer China have tumbled from last year's levels, industry officials told Reuters.

The slump in exports underscores how the pandemic is affecting global food supply chains, with demand dented by widespread closures of restaurants and transportation of goods stymied by measures to control the virus' spread.

Argentine beef shipments have skyrocketed in recent years, fuelled especially by demand in China, helping the South American nation boost beef exports to $3 billion in 2019.

Shipments jumped 50% last year to 845,877 tonnes, with China taking around three-quarters of that, official data show. The European Union accounted for 9% of beef exports.

Impact Of Coronavirus

The coronavirus pandemic, which has seen over a million people infected and caused over 50,000 deaths, has arrested the market, clogging global trade and hurting demand in a hit to Argentina as it grapples with recession and a debt crisis.


"Due to the impact of the pandemic, export markets have cut many of their purchases and are extremely restricted," said Mario Ravettino, president of the ABC consortium of Argentine meat exporters, which represents local meat packers.

Ravettino said that March beef exports to China slumped to around 15% of levels seen late last year, when the South American country was sending around 50,000 tonnes each month to meet consumer demand.

Argentina's exports to China, which rose rapidly last year, had already taken a smaller hit in January when Chinese buyers looked to renegotiate prices, but the impact since from coronavirus has been much more damaging.

China, where the coronavirus outbreak first appeared, has been in lockdown since the start of the year with strict quarantine measures that have hit the food service sector and prompted beef demand to plunge.


The European Market

Argentine meat industry officials said the market in Europe, now at the centre of the pandemic, had seen demand collapse even harder, basically paralysing exports to the region that normally buys pricier cuts of the South American country's beef.

"In Europe practically all restaurants are closed because they are in quarantine and beef in Europe is basically consumed in restaurants," said Miguel Schiariti, director of the Argentine Chamber of Meat Industry and Commerce (CICCRA).

"Importers said 'stop, don't send me any more'."

Ravettino echoed the sentiment: "The European Union has disappeared from the market. There are no exports to the EU at this time."


Local Demand

Argentine beef exporters have instead turned back towards the domestic market to keep their plants operating, even if that means thinner profit margins with lower domestic prices.

"We are trying to cope as best we can with the current situation," said Ravettino, adding that activity in local meat packing plants continued as normal for now.

Argentina, which has reported 1,265 confirmed coronavirus cases and 36 deaths, has also seen its key grains sector hit by the global pandemic, with export dollars from soy and other crops sliding in the first quarter of the year.

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