MercoPress. South Atlantic News Agency

Argentine meat industry suffering great losses because of coronavirus and closure of Chinese market

China absorbs 70% of Argentina's meat production, and the domestic market is limited in its purchasing capacity

Argentina's meat industry is becoming highly complicated because of the drop in exports to its main market, China, warned Daniel Urcía, vice-president of the Argentine regional abattoirs industry, FIFRA.

“May I remind all those involved that China absorbs 70% of Argentina's meat exports and redistributing that volume is not an easy job, even to some alternative markets for that beef since most probably the abattoirs don't have the necessary certification, as could be the case of Russia”, added Urcía.

In a public release FIFRA points out that together with the drop in domestic consumption and the increase in costs, including the price of cattle, makes the industry's situation quite precarious, both for the domestic and export markets“.

”Coronavirus turned into reality the long standing specter which we all feared, what happens if China ceases to buy Argentine meat?“

FIFRA vice-president said that while trade with China is virtually paralyzed, some shipments had to be unloaded in transit in other ports, because of lack of staff at terminals to receive the containers.

”In some cases containers are waiting in ports, in other cases shipments had to be suspended, and the beef is deposited in cold storage in Argentina, all of which as can be imagined makes things most complicated“

Coronavirus only made things worse, since Chinese importers towards the end of November has already started to suspend operations and renegotiate contracts. In effect many companies have significant volumes of meat in cold storage, or their own or contracted, and now they must find where to divert exports, suffering great losses, plus all the liquidity, fiscal, labor and operational issues that need to be addressed”.