Trade war fallout ‘starts to bite’ in dealings with China

The Labour Day holiday (1–5 May) meant little business with China last week. Tuesday 6 May was the first solid day of contact between exporters, importers and brokers, and the mood was far from buoyant, several sources told World Beef Report (WBR), just days before the SIAL Shanghai fair (19–21 May).

“The first day was dead and opened lower,” a regional trader summed up. In Brazil bids for forequarters were heard at US$/t 5,500 CFR. “That price is way off the mark for us,” a Brazilian exporter told WBR. For six cut Argentine cow sets, sources quoted US$/t 5,200 5,400 CFR; 80 VL trimmings at US$/t 3,800 3,900; and shin & shank at US$/t 5,500 5,800 CFR.

Before the holiday break a broker reported deals from Uruguay at US$/t 3,950 CFR for bone in navel plate and US$/t 3,850 CFR for bone in brisket—about US$/t 50 lower than previous values.

“Except for some low value bones, we virtually had no business with China this week. The outlook is more pessimistic, and the trade war consequences are starting to show,” another trader said.

An Australian operator, by contrast, told WBR that Chinese demand for both grain and grassfed beef “remains very firm”, with prices at record nominal highs. Reported grassfed oyster blade traded at US$/t 9,600 CFR and grain fed at US$/t 13,100; boneless navel plate at US$/t 7,350 (grassfed) and US$/t 9,200 (grain fed). Grassfed shin & shank closed at US$/t 6,800 CFR, 100 day grain fed chuck roll at US$/t 10,250, tri tip at US$/t 10,200, knuckle and flat at US$/t 7,850, bolar blade at US$/t 7,800, chuck tender at US$/t 8,250 and eye round at US$/t 8,200 CFR.