Buenos Aires, January 12, 2019. The Buenos Aires Grain Exchange (BCBA) alongside the Institute for the International Agricultural Negotiations (INAI) released last week a report about the bilateral agricultural commerce between Argentina and China.
Basically, the report stressed that the South American country enlarged its agricultural exports to China until to represent the second destination behind the European Union. During the ’90, China was the eleventh importer country for ag-products, and now it occupies the second place. But considering that China’s ag-imports grew in the latest years at a 16% annual average rate, until around US$120 billion, the US$3,6 billion of the Argentine exports occupies a minor position in the Asian country’s suppliers ranking.
While other world suppliers enlarged their exports at a 16% annual average rate, Argentina grew at a modest 4%, while the US did it at 13% and Brazil at 21 percent. In fact, the country lost some positions in the ranking of China suppliers.
On the other hand, Argentine exports to China are concentrated in a few products. Soybean is the most relevant one totalizing 63% of the exports as an average of the 2016/2018 period. Frozen beef accounts for the other 15% and frozen prawns another 7 percent. That is to say that three products represent 85% percent of the total exports.
The paper unveils that the US-China trade war and African pork fever represent an opportunity for Argentina. But beyond this circumstance, analysts explain that the potential worth of the export climb to another 5,7 billion dollars if Argentina is able to put other products in that market, like sorghum, cheese, wine, corn, wheat, and milk powder, between others.
The paper recommends a regional approach (Mercosur) to aboard China market, and to build the image of a reliable country, as a supplier of food and other agricultural products, and to consolidate a mutual relation where China’s investments in Argentina could benefit the bilateral commerce.