Editor: Andrés Oyhenard
andres@tardaguila.com.uy
China's imported beef market showed some signs of improvement amid expectations that Brazil is close to exhausting its import quota, although several market participants believe it is still too early to speak of a sustained turnaround.
A regional trader said the market still lacks a clear direction. "There is no clarity," he said. He reported deals for 80CL trimmings from Uruguay at US$4,600/t, down sharply from the US$5,200/t CFR traded during the SIAL Shanghai exhibition in May. Shin & shank was quoted at around US$7,600/t, he said.
A Chinese trader, however, said market sentiment improved over the past week as expectations grew that Brazil's quota is close to being filled. According to the source, 8-cut forequarters gained around RMB2,000/t (about US$300/t) in the wholesale market, while prices for other products remained broadly stable.
Along the same lines, an Argentine trader said the market had moved from "intensive care to intermediate care; there are signs of life," although he cautioned that it is still too early to call it a sustained recovery.
The source estimated that, once Argentina filled its third-quarter (July-September) US TRQ allocation, part of the available export supply could be redirected to China. However, the pace of recovery will depend on how quickly importers reduce accumulated inventories. "We'll have to see when they start consuming what they have. Summer doesn't help," he said.
Other sources quoted Argentine cow 6-cut sets at US$6,100-6,200/t CFR, while 23-cut sets were reported at US$6,300-6,400/t CFR, reflecting still-weak demand but higher prices than two weeks ago.
A Chilean exporter told World Beef Report (WBR) that Chinese buying interest improved over the past week, with stronger inquiry levels and slightly firmer prices. He reported sales of cow forequarters at US$5,300/t CFR.
A Brazilian trader said lower cattle prices are allowing exporters to regain some competitiveness in alternative markets. "Brazil is now very focused on Chile and the United States," he said. He added that lighter snowfall in the Andes this year has also facilitated trade flows into Chile. Regarding China, he said buyers remain extremely cautious. "There is still a lot of speculation surrounding Brazil," he summarized. A broker reported Brazilian shin & shank deals at US$5,600/t CFR, outside quota.
