Trade agreements will have a big impact on beef industry this year -Rabobank report
A number of trade agreements, such as the Trans-Pacific Partnership (TPP) and a proposed Mercosur/EU trade agreement, look set to start having an impact on global beef trade in 2018, announced a report of Rabobank.
In a few months, the analysts expect that global beef exports to show a growth for this commodity on different markets. The events are doubled by an increase in blockchain solution developed by food and tech companies in response to changing consumer preferences. "While many of the early applications have been driven by the desire to increase traceability and transparency, with a focus on food safety, opportunities do exist further up the supply chain", says Angus Gidley-Baird, Senior Analyst – Animal Protein.
From his point of view, blockchain is superior to current solutions when it comes to sharing genetic traits, making it simpler to track productive performance. A chain including, among others, the producer, feedlot, farmer, and genetic organisation would be able to share performance and verify breeding values, which is all transferred in real-time in the transaction.
On the other hand, the classic trade will be encouraged by the signing of TPP agreement in March with gains predicted for beef-exporting countries as Australia, New Zealand, Mexico, and Canada as tariffs on imports are going to diminish on markets like Japan, Chile, Vietnam, and Peru.
Mercosur/EU trade agreement is another subject meant to attract attention from the bank's analysts as a new proposal to allow Mercosur countries to send 99,000 tonnes of beef to the EU at a lower tariff level has been tabled as part of the negotiations. "This is a significant volume, given total EU beef imports over the last couple of years have been between 204,000 tonnes and 270,000 tonnes. Brazil, Argentina, and Uruguay are already the EU’s main suppliers (together accounting for 63% of total EU imports)—Brazil alone accounted for 107,000 tonnes in 2017", explained Rabobank's experts.
Meantime, inside sources mentioned that the Mercosur Member States are actually targeting a volume of 150,000 tonnes in the negotiations.
China is another market expected to increase the volume of beef imports, as the Beijing officials just granted access for chilled beef from Argentina, imports from two facilities in Belarus and also signed a protocol for importing beef from France and the UK. Live-cattle imports could also become a characteristic of the Chinese market in the years to come as in January registered its first the first boatload of live cattle exports from northern Australia.
The US is a market where beef production is set to increase this year following a growth by more than 3%, or an additional 360,000 tonnes at the end of 2017. At the start of 2018, with updated cattle numbers, favourable market conditions, and given that large area of the US are in drought, production increases have been revised by up to about 5%, or some 700,000 tonnes, shows the Rabobank report.
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