Editor: Andrés Oyhenard
andres@tardaguila.com.uy
The Chinese market cooled sharply over the past week, with very limited new business from the region, while its main supplier, Brazil, has begun shifting its focus toward alternative destinations.
A Chinese market operator told World Beef Report (WBR) that the market was “terrible last week” due to a “significant drop in prices.” The first factor, he said, is seasonal. “The weather is getting hotter and beef consumption has entered its low season,” he explained, in line with the weaker demand typically seen during the Northern Hemisphere summer months.
Adding to this is increasing financial pressure on importers and distributors. According to the source, some companies are facing tighter credit conditions and need to generate liquidity, forcing them to sell inventory at lower prices to recover capital.
A third factor is the high level of inventories. “Cold stores at the ports are already full of beef,” he said. In some cases, operators still hold containers that have been in storage for more than six months, encouraging sales aimed at reducing inventories and freeing up space.
An Argentine trader reported bids from China for six-cut cow beef at US$/t 6,300-6,400 CFR, and for butt cuts at US$/t 7,000, values that remain “far below” processor expectations.
Similarly, a regional trader noted that the main competition for new imports today is not coming from other exporters but from the large volume of product already available in China. According to the source, Chinese importers find it more attractive to purchase already-cleared product because it is cheaper, immediately available, and eliminates the risk of price fluctuations during transit.
This situation has been compounded by tighter financing conditions. According to the trader, some state-owned companies have stopped financing beef imports as part of a policy that appears aimed at supporting domestic production.
In addition, several Brazilian exporters are demanding stricter payment terms. “The Brazilians are asking for up to a 60% advance payment,” he said, citing concerns that shipments could ultimately be affected by the evolution of China’s quota system (1.1 million tons), which is expected to be exhausted in July.
“At this point it is very difficult to continue selling to China,” a Brazilian exporter told WBR. According to the source, some companies have already begun taking concrete measures. “We are stopping production for China and also reducing sales. We have local distribution channels, so it won’t be that bad,” the exporter said, noting that strong domestic demand in Brazil is providing an outlet for cuts that are becoming more difficult to place in China.
Another Brazilian processor said its company will stop producing for China starting next week. “This week we are still producing for China, but next week we move into a different reality,” he said. Much of that volume will be redirected to the domestic market, where demand for both bone-in and boneless beef remains firm. “A lot of the product will be moved into the local market,” he added.
The company also has contracts already booked for the United States that it will begin producing in June. However, the source warned that signals from that market are becoming less encouraging. “The feedback we’ve received from the US is quite concerning, with limited interest and indications of lower prices,” he said.
Even so, a combination of an estimated 20% reduction in production, domestic sales, and already-contracted US business should cover much of June’s activity. The big question mark is July. “If cattle prices ease, we will have a chance to compete in other markets where we are currently not competitive,” the exporter concluded.
Meanwhile, an Australian trader told WBR that the Chinese market is experiencing a period of slower activity, although without generating concern among exporters operating under long-term programs. According to the source, Australia has already used close to 90% of its quota, but the impact on business has been limited.
“We see China as fairly quiet, with prices slightly lower, but still above the levels seen at the beginning of the year and during most of 2025,” he said. He added that a large share of Australian sales consists of grainfed beef programs, a segment that has shown less sensitivity to the quota discussion.
