Argentina’s beef industry wary of repercussions of export bans

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By Natalia Kidd

Buenos Aires, May 24 (EFE) .- Argentinian beef producers are worried about the government’s attempt to lower domestic prices by banning exports, warning against repeating the scenario that unfolded in 2006.

The measure, which came into effect Thursday for a period of one month, has been widely denounced by exporters, processing plants and unions in the sector, which employs 400,000 people and generates export revenues totaling around 3 billion dollars a year.

Opposition also came from the governments of some beef producing provinces and ranchers, who protested against the measure by refraining from sending live cattle to the Liniers cattle market in Buenos Aires, the largest in Argentina. , until Friday.

The South American country is one of the world’s largest consumers of beef per capita (45 kilograms per year), and the government says the measure is aimed at lowering prices for domestic consumers.

Beef prices soared 66.1% in April from the same month of 2020, well above the 46.3% surge in overall consumer prices.

But the beef industry says an export ban will not help contain inflation and will have multiple negative economic effects on the country, which has been in recession for three years.

He also urged the government to learn from the “mistakes of the past”, referring to interventions in the beef supply chain between 2005 and 2010, including a multi-month beef export ban in September. 2006.

“It was a disaster. We lost 10 million head of cattle. We went from a global market share of 10% to less than 2%. And three years (after this ban was put in place), the beef ended up costing three times as much in real terms, ”breeding consultant Victor Tonelli told Efe.

What’s worse, according to the expert, is that the government is well aware of the impact, as current President Alberto Fernandez was chief of staff from 2003 to 2008.

According to a report by the Institute for the Study of Argentine and Latin American Reality of the Mediterranean Foundation, the 2006 beef export ban resulted in export losses totaling $ 1.5 billion per year. , a drop in production and an estimated $ 4.9 billion reduction in the value of the country’s cattle herd.

The industry also claims that this measure resulted in the loss of 19,000 jobs.

Argentina is the fifth largest beef producer in the world and the fourth largest beef exporter.

About 30 percent of the sector’s output is shipped overseas, with export revenues of around $ 2.72 billion in 2020. Chinese importers account for about 75 percent of that foreign demand.

Global beef prices rose about 10% after Argentina announced its latest export ban, Tonelli said, adding that the South American country would lose export revenues totaling around $ 250 million per month.

While the ban excludes certain shipments associated with export quotas (including the European Union’s Hilton quota for high-quality beef) and preferential tariff agreements, many companies will be forced to violate their standards. export contracts.

“Companies that do not meet their contractual obligations will clearly incur penalties. And worst of all, Argentina is losing its seriousness and credibility as a supplier, ”said breeding consultant Fernando Canosa. EFE

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