Export Argentina to re-enter US beef market
Argentina will have a 20,000 t country specific quota on beef exports to the US, identical to that of Uruguay, and out of quota trade will incur a 26.4% tariff. Uruguay regularly fills its allocation of the country-specific quota.
Next year, Argentine beef production is forecast to increase 2% to 3.0 mill. t carcase weight. Export markets will benefit from the increased supply, while soaring levels of inflation and a severely devalued peso have hit domestic purchasing power.
Argentine beef as a result has become extremely attractive to global markets – beef exports totalled 289,000 t shipped weight for the year-to-October, an increase of 71% compared with the same period last year and almost all of which has gone to China. The reintroduction of a beef export tax – four pesos per dollar – has not been enough to limit to outflow of product into global markets.
However, shipments to the US may be muted and limited to manufacturing beef in the short-term, given China is currently sucking up any available beef out of Argentina, and the rest of South America. The high dependence on China – which has accounted for over 50% of Argentine beef exports so far this year – leaves the country somewhat exposed to any significant downturn in demand in China.
Next on the Argentine access agenda will be high-value trade opportunities in Japan (Patagonia, a FMD-free region in southern Argentina, gained access earlier this year but only 174kg has since been shipped), Korea and an expansion of its EU footprint as part of the on-going FTA negotiations within the Mercosur block.