China has huge accumulated reserves. It is expected that shipments will reduce in the coming months, while importers are demanding reduction in prices.
Beef demand plummets in China At the recently concluded Sial Fair in Shanghai, Chinese importers, who are now trying to get new and significant reductions in prices paid, have argued that There are large accumulated stocks.
It is about imported meat that is in the hands of the same importers, distributors and processors, and until these stocks are absorbed, the price and quantity of imported meat will decline.
The end of the restrictive “Covid-19 0” policy, decided last December, has brought a significant recovery in economic activity, but in terms of food service, which is the commercial channel that concentrates demand for imported beef, saw he is gone still far from pre-pandemic levelsThere are very few people on the street, less traffic, and many restaurants, bars and gastronomic establishments are closed.
The pandemic has left a deep psychological impact on the attitudes of consumers, who are more cautious, who have spent their savings, who have cut back on many expenses and are moving out of the house, and who look to the future with a certain gloom. .
Argentinian beef exports to China have been relatively stable in recent months.With an increase in shipments to this destination from Uruguay and Australia, but a very steep decline in shipments from Brazil.
In short, the neighboring country placed only 41,000 tonnes in April, compared with some 100,000 tonnes per month it had sold in the months before the suspension – due to a case of BSE in Para – and well below the peak of September last year. Below , which was 135 thousand tons. Brazil no longer has sanitary restrictions to access this market, but finds that demand from the Asian giants has declined sharply, at least in the short term.
After year-on-year declines of the order of 30-35% in amounts paid, Chinese importers – now post-Shanghai fair – are testing another wave of price drops, in some cases by US$100,000 per year. more than 500. US$700 per ton.
In recent months, if we sum up shipments to China from Brazil, Argentina and Uruguay, which account for 70% of the Asian giant’s purchases, and add exports from the United States and Australia, we can estimate that Are Chinese beef imports will drop to 170-180 thousand tons per month in the coming months,
The retreat will be below last year’s May-June (220-230 thousand tonnes) and further from the import peak of last July-August, which was 270-273 thousand tonnes per month.
Last April, Chinese beef imports fell to 183 thousand tons, which is 5% less than in April 2022.
According to Chinese importers, the accumulated beef stockpile includes hundreds of thousands of tons and would be equivalent to two or three months’ worth of imports. There is also an abundant supply of meat – at low prices – from Brazilian refrigerators, and ports and warehouses contain a lot of meat of the same origin whose sanitary documentation (BSE) is uncertain.
Unless these accumulated quantities are absorbed, it will be difficult to improve prices and quantities purchased.