Uruguay seeks to reduce reliance on China for beef exports — MercoPress

Uruguay seeks to reduce reliance on China beef exports

In the first half of this year, North America (mainly the United States) has become the main destination for Uruguayan beef, followed by China

Although the performance in the first half of the year was not so encouraging, the U.S. Department of Agriculture (USDA) predicts that the Chinese market will respond better in the second half of the year.

Uruguay is committed to reducing its reliance on the Chinese market for meat and beef sales. In recent years, China, like most other Latin American countries, has become Uruguay’s main trading partner, absorbing unprocessed agricultural products and minerals while injecting Chinese industrial products into the local economy.

Uruguay is no exception, with its high-quality beef being sold at low prices by buyers, possibly due to the slowdown in China’s economy and consumption, but in the face of this situation, Uruguayan authorities and the private sector are promoting exports to other markets such as North America.

The pullback in Chinese demand and prices appears to be similar to what has happened in Brazil, Australia and New Zealand, with the exception of Argentina, where Beijing is likely interested in recouping the billions of dollars invested by previous governments.

According to official data from the Uruguayan National Meat Institute (INAC), from January to August 10 this year, Uruguay’s beef exports reached US$1.223 billion, accounting for 81% of Uruguay’s total meat exports, a slight increase of 0.1% over the same period last year. In terms of quantity, beef exports increased by 7.1% to 299,950 tons, but the average price of Uruguayan beef fell by 11% from the same period in 2023 to US$4,079 per ton.

In any case, the big news this year is that, according to INAC data, China is no longer the main source of revenue for Uruguayan beef exporters. The Asian giant has been replaced by a North American group, with the United States playing the main role (Canada and Mexico buy Uruguayan beef in smaller quantities). According to INAC data, as of August 10, the United States, Canada and Mexico accounted for 32% of Uruguayan beef export revenue, with a total of 97,375 tons sold and a total revenue of US$390.8 million.

China followed closely behind, accounting for 30%, totaling $371.5 million and a total of 115,324 tons. The European Union ranked third, accounting for 16%, with purchases of $196.1 million (27,736 tons). Israel and Mercosur ranked fourth and fifth, generating $69.8 million (15,077 tons) and $61.6 million (9,644 tons), respectively.

Other markets included Japan ($24.8 million, 6,270 tons), the United Kingdom ($23.4 million, 3,555 tons) and Russia ($22.3 million, 10,941 tons).

Despite the lackluster first half performance, the U.S. Department of Agriculture (USDA) predicts a better market response in China in the second half of the year. Chinese demand is expected to grow by 1.3%, the slowest in nearly a decade, but meat imports should rise from 3.9 million to 3.95 million in any case.

The U.S. Department of Agriculture believes that weak growth in Chinese consumer demand is acceptable, but local production and last year’s large inventory will also affect the consumer market. China’s total domestic meat production this year may be 250,000 tons higher than in 2023.