China’s insatiable appetite for Latin American commodities shows no signs of slowing. This is especially true for meat products. According to Chinese government statistics as of September, China imported 1.57 million tonnes of fresh and frozen beef, which is almost 40% more than the same period in the previous year.
China’s domestic production of meat is large but it has not been enough to satisfy demand, this has been attributed to a national protein deficit following the decimation of the pig herd by ASF (African Swine Fever) and a growing middle-class consuming more.
Brazil and Argentina have both increased their market share this year without cannibalising each other. Argentina witnessed a growth of 40% from last year and plans to continue investing in production capacity. A soft commodities trade specialist in Buenos Aires warns, “We have to supply in a complementary way to China’s domestic production. It might be beef today but it could be pork tomorrow.”
“We have to supply in a complementary way to China’s domestic production. It might be beef today but it could be pork tomorrow.”
Soft commodities trade specialist, Argentina
Argentina’s trading relationship with China is relatively young, the trade specialist continues, “It was only 20 years ago that we began to get to know each other, but today the Chinese market is essential for our exports and is the main region for growth.”
Between 2006 and 2015, Argentina’s livestock policy effectively closed the meat export industry in the country. Following a policy shift by former President Mauricio Macri, exports were boosted with export to China driving the growth.
An executive at a meat production business reports, “We were out of international trade for nearly 10 years, then the growth from 2015 to today has been phenomenal. In 2015 we exported 200,000 tonnes, by the end of 2019 it had grown to 800,000 tonnes.” Argentine meat processing plants are planning to invest USD 187 million in a bet to increase exports over three years up to 1.2 million tonnes per year.
“We are investing heavily to position ourselves in China, we aim to double exports in the short to medium term.”
Executive, meat producer, Argentina
His optimistic outlook persists, despite currency problems and the pandemic, “We are investing heavily to position ourselves in China, we aim to double exports in the short to medium term. Today we focus on beef, but we are looking to expand to poultry and pork.”
The trade specialist also sees opportunity in pork, “We have 5 million pigs in Argentina today, that could grow by ten fold and all of it be placed in China.”