Saturday, December 2, 2023

Global inflation, the price of the dollar and the closure of the Chinese livestock market to Brazil are affecting Colombian livestock exports

According to DANE statistics, the beef cattle sector contributed $310 million to the country’s export basket in 2022, accounting for 62% of the sector’s total exports, which totaled $502 million.

In terms of head count, 392,965 live cattle were exported in 2022, representing sales of $310 million. Egypt, Saudi Arabia, Iraq, Jordan and Lebanon are the main destinations in this market.

Livestock exports fall by 46%

According to data from the Fedegán-FNG Office of Planning and Economic Studies, 194,109 live cattle were exported between January and April 2022, while 88,508 animals were exported in the same period of 2023. This represents a lower export volume of 105,600 cattle, which represents 46% of the cattle exported in the same period last year.

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“Colombia exported only 28,500 animals to Iraq in the first half of the year,” Dulcey said.

“Expoganados negotiated over 73,000 male cattle in the first half (of this year) with businessmen from Egypt, Jordan and Iraq, but this figure represents a decrease of 40 percent compared to 2022,” he stressed.

Why have live cattle exports declined this year?

Dulcey attributes this behavior of foreign trade in live cattle to three interrelated economic factors that negatively impact Colombia’s exports:

1- High inflation worldwide, which directly and indirectly affects prices,

2- The decline in the price of the dollar compared to the strengthening of the Colombian peso.

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3- The closure of the Chinese beef market to Brazil due to health problems among cattle registered in the latter country.

According to Dulcey, “There is more supply in Brazil and prices are competitive. Therefore, there is a strong possibility that buyers have entered this market and are displacing Colombia.”

Meat price and live cattle exports

The explanation given by a section of the meat processing industry that the sharp increase in beef prices in the domestic market was due to the export of live cattle is unrelated to the observations.

While live cattle exports fell in the first four months of the year, the price of beef in the domestic market has slowed its growth rate but has not fallen.

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It rose by 2.4% in the first half of the year, Óscar Cubillos tells us today in his column (A bet and a proposal to improve the analysis of the price of meat), in which he also notes that the problem of reduced meat consumption also has its origins the deterioration of real money income, since despite the significant increases in the minimum wage in recent years (based on inflation growth), it has failed to maintain people’s purchasing power.


Nation World News Desk
Nation World News Desk
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