Following the export results for the first half of the year, one of the agricultural sectors most affected by the downward trend in foreign trade dynamics in the country was cattle, for which Expert estimates suggest that no more than US$200 million will be invoiced.
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According to Dane data, for the first six months of the year, exports of live cattle fell by 17.7%, reaching US$97.1 million. Even when detailing the results for June alone, The drop in foreign sales is much greater, falling by 38.3% and billing around US$9.3 million.
Likewise, in the data on meat and prepared products, during the first half of the year these products decreased by 44.1%, billing around US$40.8 million, while in the monthly data the negative variation was 37.6%, where only US$7.9 million were obtained.
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Although the general export dynamics have been on a downward trend for more than a year due to the situations that have been experienced internationally, the truth is that in this agricultural sector The price of meat in Brazil, the exchange rate and export regulations are the underlying causes of the decline in sales.
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According to Juan Gonzalo Botero, executive president of the Association of Livestock Exporters (Aexgan)The price per kilogram-pasture-scale of cattle in Brazil is between US$1.4 and US$1.5, which is around $6,000, while in Colombia it ranges between US$1.8 and US$1.9, which is around $7,500.
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The drop in price, explains Botero, is due to the fact that the neighboring country has allocated a budget for the genetic improvement of cattle and its flagship breed, the Nelore, which in Colombia is similar to the Zebu. This injection of resources has allowed production costs to be reduced, due to improvements in livestock production and reproductive indicators.
Another point addressed by the president of the association is that The Brazilian real has devalued more than the Colombian pesowhere even in the first half of the year the depreciation has been 12%, while in Colombia it is estimated at 4%.
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“Brazilians receive more reals for each dollar exported in cattle than we do in Colombia with pesos. They are more competitive with the exchange rate, in addition to being our main competitor in the region.“, Botero said.
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Meanwhile, Oscar Cubillos, director of Planning and Economic Studies of Fedegán (National Federation of Cattle Ranchers), The appreciation of the Colombian peso has been affecting exports, Considering that interest rates in the country have been falling, a fact that encourages short-term investments and stimulates the entry of dollars into the country.
“These are normal market situations that do not depend on the livestock sector. As this interest rate falls, there will also be a readjustment of the exchange rate.”, he explains.
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Limiting regulations
After the Colombian Agricultural Institute of Colombia (ICA) approved the draft resolution last year on the export of cattle on the hoof, in which the space that a head of cattle must have on the ship was increased, The livestock sector has shown that this has had an impact on the export of animals.
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Juan Gonzalo Botero explained that there is still uncertainty about the effect of the change in regulations, which indicates that this space must grow from 1.2 square meters to 1.69 square meters per animal, so also the number of cows sent to receiving destinations has been reduced.
“A ship carrying 10,000 cattle could only carry approximately 8,000 under the new regulations. This means higher costs for exporters, as the value of production increases, which is transferred directly to the farmer, and the cost of the activity would be unviable, as the price paid per animal would fall.“, says Botero.
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This situation has resulted in fewer ships arriving in the country, which is one of the main concerns of the sector at the moment.We hope that the ICA and the Government will support us in this work that generates more than 3,000 direct jobs and benefits 320,000 livestock farming families.”, he notes.
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He adds that in the last five years this part of the livestock activity has had average exports of US$300 million, but “With this drop, it will undoubtedly be reduced and we believe it will be difficult to reach US$200 million.“, warns the president of Aexgan.
For the Fedegán manager, it must be taken into account that There is a time of year when export activity is reduced due to the months of Ramadan in the Middle East, where the member countries of this territory are consolidated as the main buyers of Colombian cattle on the hoof.
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Opening new markets
Given this situation, the president of Aexgan announced that at this time There is a bet that Colombian cattle will enter the United Arab Emirates marketwhich is considered one of the most demanding, but one of those with “significant remuneration.” He added that they are also looking to reach Cuba and Morocco.
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“We are waiting for requests from the health organizations of each of these countries to process the opening of new protocols with the ICA.“, he said.
According to Dane data, 100% of the export portfolio US$ 97 million corresponds to live animals, meat with US$ 32.8 million and US$ 5.8 million to offal.
Also, as of June, The main destination country is Iraq, with 72,137 heads, followed by Egypt with 33,283 heads and Saudi Arabia with 14,748 heads.
