China’s list of beef suppliers is growing thinner by the day. New Zealand consumers can expect to feel the pinch.
When China embarked on its diplomatic and trade war on Australia – for the unforgivable sin of asking Beijing to start telling the truth about the Wuhan plague – Australian beef was one of its first targets. Beijing obviously figured that they could punish Australia with impunity because they could always get the beef that affluent Chinese crave from elsewhere.
That elsewhere mostly being Argentina. Except…
Argentina has announced a snap 30-day ban on all beef exports and the decision is set have ramifications for the trade globally.
One of the world’s biggest beef exporters, Argentina moved about $US3 billion worth of product in 2020, mostly to China.
It seems that Argentina has decided it needs its own beef more than it does China’s money.
Independent analyst Simon Quilty, said the ban appeared to be driven by upcoming national elections and a desire to lower domestic meat prices.
“[Argentina has] had soaring beef prices as well as inflation … so the government is feeling the pressure and there’s a need to try and win back the voter,” he said.
“So they’ve looked to this ban to effectively lower the cost of beef within Argentina.”
As Australians have also found, the Chinese export market might have made a few exporters very rich, but consumers got the raw end of the steak. Beef prices have soared at the same time that quality dived. When China pays top dollar for the best, locals get left with the scraps, at exorbitant prices. The same has been true for everything from premium wine to seafood. Fishermen might have complained bitterly, but Tasmanians were jubilant this Christmas, to see locally-fished lobster in abundance once more, at prices that they hadn’t seen in years.
Argentine consumers haven’t fared much better.
President Alberto Fernandez reportedly told a beef export association that “emergency measures” would be developed for the sector.
“The president expressed his concern over the sustained growth in domestic beef prices over the last few months,” according to a statement reported by Bloomberg.
Argentina exported about 750,000 metric tonnes of beef last year, 68 per cent of which went to China.
It looks as if it will be Kiwis turn to next experience the hard results of China’s acquisitiveness.
When asked which nations were best-placed to fill the gap, Mr Quilty said China would face a “real challenge”.
“Brazil’s exports are down dramatically, Australian beef exports are down, they will look to North America, but they won’t be able to buy cheap, lean beef [from the US],” he said.
“So at the moment it looks like New Zealand is one of the only shows in town, so to speak.”
ABC Australia
No doubt New Zealand beef producers will be very happy – and rich.
Ordinary Kiwis, on the other hand, had better prepare to start paying top dollar for second-rate.
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