South American meat conquers Halal markets-Diepresse.com
The trade war, which Trump, forces various countries to look around for new partners. Brazil and Argentina are now the first winners and can score with these products.
The escalating tensions between the USA and China, due to the US tariffs imposed, have opened up the opportunity to increase their exports from meat to grain and thus secure global market shares.
Beef becomes a new export hit
The latest opportunity seems to be meat. President Donald Trump’s US tariffs on eight of the ten largest American beef buyers have already reorganized the trade currents and have increased the exports of Brazilian beef into Halal markets such as Algeria and Turkey. Japan, America’s second largest beef buyer, is already in advanced conversations to buy cheaper meat from Brazil.
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And every economic abandonment caused by the trade war will persuade other international beef buyers to shift their purchases to cheaper suppliers, especially Brazil, according to the DataGro market analyst Guilherme Jank.
China’s departure from US products
So far, China’s departure from US products has proven to be an important engine for Brazilian and Argentine exports. The Asian superpower ordered a large amount of soybeans from Brazil in April and thus gave the country a head start in its agricultural rivalry with the United States, and recently an agreement was made to resume wingy deliveries from Argentina. China also opened its market for Argentine corn last year.
According to Marcos Jank, senior professor for Global Agribusiness at Insper, deliveries to Europe could also increase, since the talks about a trade agreement between the South American trading block Mercosur and the European Union gain dynamic.
The Argentine catering generators could also benefit from the higher prices, as there are not many alternative suppliers for the grain used in animal feed. China is the world’s largest customer and the USA is the largest supplier.
Commercial war could take until autumn
Should the trade restrictions continue until autumn when the soy and corn harvest begins in the USA, the South American grain producers will have another opportunity to offer alternative deliveries.
« If this confusion stops until the fourth quarter when the USA harvest and China and Europe shift their soy and corn runs there, the United States will not be able to export, and these countries will continue to buy in South America, » said Ivo Sarjanovic, a former soymate manager at Cargill Inc. and Professor at the University of Torcuato di Tella in Buenos Aires.
Nevertheless, the price volatility on the agricultural markets remains a risk for all exporters. While the physical premiums for soybeans in Brazil and Argentina initially rose after the announcement of the tariffs, a global recession would probably dampen the demand and push the futures prices down. But even in this case, according to Jank from DataGro, it is more likely that an economy that imports beef will consume rather cheap beef than expensive beef ”.Bloomberg)))
