Argentine beef exports to its top buyer China fell almost a third in January due to a price dispute with Chinese importers and the effects of a coronavirus outbreak, the head of the country's meat export chamber revealed.
Soaring demand from China last year saw sales of Argentine frozen boneless beef double to 408,500 tonnes, worth around US$ 2 billion, official data show. China bought three-quarters of Argentine beef exports, with buyers willing to pay a premium amid a shortage of pork.
The market has totally changed, said Mario Ravettino, head of the consortium of Argentine meat exporters, known by the initials ABC, which represents meat-packing plants responsible for preparing Argentina's famously succulent steaks for export.
He said sales in the first month of 2020 fell an estimated 30% compared with a month earlier, as Chinese buyers looked to renegotiate deals to lower prices and amid the negative effects of the coronavirus outbreak on ports activity.
The steep monthly fall is previously unreported, though the coronavirus outbreak has more broadly disrupted China meat imports, hitting global supply chains.
The estimated January figure - calculated at just shy of 31,500 tons - would be the lowest in nine months after sales ramped up throughout last year, with December sales of 44,878 tonnes. The month was however still up versus January 2019.
Ravettino said the Chinese government had at the end of last year limited credit to Chinese firms for Argentine meat imports and started buying beef from other countries with the aim of reducing contract prices, which prompted cancellation of orders.
This situation means we have to renegotiate prices and re-establish when that merchandise is going to arrive in China, said Ravettino. He explained that deals previously at up to US$ 7,000 per ton were now happening at up to US$ 4,300 per tonne.
China's tougher position in price negotiations has also impacted Argentine farmers.