Russia Is the Major Foreign Market for Colombian Beef

Cattle And Buffaloes June 29, 2018
Author: Sergey Avramenko
Head of Global Markets Research Team

IndexBox has just published a new report "Colombia: Beef (Cattle Meat) - Market Report. Analysis And Forecast To 2025". Here is a summary of the report’s key findings.

Cattle Meat Consumption Contracted Slightly

In wholesale prices, the Colombian cattle meat market accounted for $2.0B in 2016, which approx. reflected the level of the previous year. It reduced sharply from 2012 to 2015, due to a decline in producer prices, following a period of steady growth over the previous three years. In physical terms, consumption remained relatively stable over the last five years with only mild fluctuations, totalling 820K tonnes in 2016, 3% less than the previous year (IndexBox estimates). The slight decline in consumption can be explained by the negative impact exerted by several economic factors, such as high unemployment, poor consumer confidence and tax reform, resulting in reduced consumer spending, also on cattle meat.

Modest Consumption Growth with Regard to Cattle Meat Is Forecast in Colombia 

Beef is a staple food in Colombia, where per capita consumption averages 17 kg; this figure is significantly higher than the global average. The Colombian beef (cattle meat) market is fully supplied by domestic production. This is feasible as a result of the country’s high volume of available grazing pasture areas, favourable climatic conditions, and sizeable livestock herds with a sound genetic lineage; Colombia also boasts a strong tradition of raising livestock. Beef cattle meat production is an established industry in Colombia and no significant changes in cattle meat consumption are anticipated in the immediate term. Population growth and increased household income, therefore, are set to be the main impetus factors spurring market development. 

Colombia's rate of economic growth is expected to accelerate in the near future: an improved labour market, combined with the stabilization of the exchange rate and a weakening inflation rate will boost private consumption; a rise in oil prices will promote export growth. Household disposable income is set to increase, against improved economic performance and employment, thereby driving the increased consumption of cattle meat. 

Driven by population growth and an increase in disposable incomes due to the current economic recovery in Colombia, cattle meat consumption overall is expected to continue an upward consumption trend over the next nine year period. Market performance is forecast to accelerate, with an anticipated CAGR of +0.8% for the period from 2016 to 2025, which is expected to lead the market volume to 879K tonnes by 2025.

Beef Production in Colombia Contracted due to Drought-induced Cattle Losses

From 2007 to 2016, Colombian cattle meat output totalled 828K tonnes in 2016. Production declined from 2009 to 2010, and then recovered over the next three years, with furher mild fluctuations though to 2016. Over the last year, the production volume contracted by 3%, due to a reduction in the numbers of animals being slaughtered for cattle meat production. The 2015 drought in Colombia, durng which a high volume of livestock perished, can be quoted as being the reason for the reduced output figures. 

Despite this, however, Colombia remains one of the key cattle meat producing regions in Latin America, second only in terms of volume of production to Brazil, Argentina and Mexico. In addition, production in Colombia is more profitable: according to data released in 2016, the average producer prices in Colombia appeared significantly lower than in the countries listed above; producer prices in the largest cattle meat producing region, namely the U.S., exceeded Colombian producer prices by approx. 85%. 

The Colombian Cattle Meat Market Remains Buoyed by the Domestic Supply

The Colombian cattle meat market remains completely supplied by domestic production and appears unreliant on imports. Colombia boasts its own production capability, which satisfies the relatively stable domestic market. A negligible volume of imports is supplied largely from the United States. The weakening of the Colombian peso over the 2013-2016 period resulted in a rise in the cost of imports, which, combined with adequate domestic production, buoyed the independence of the domestic cattle meat market in Colombia. 

Beef Imports into Colombia Remain Negligible

The volume of total beef imports in Colombia totalled 1.7K tonnes in 2016, which equated to $11.1M in value terms. After a sharp contraction observed in 2008, the volume of imports remained relatively stable from 2009-2015 and increased rapidly in 2016; this, however, remained insufficient for imports to attain their pre-crisis level of 2007. These figures remain insignificant in terms of the total market volume and, therefore, fail to make any tangible impact on the market.

The U.S. remains a key supplier of beef to Colombia, accounting for 76% of total imports in 2016. Paraguay (9%) and Chile (8%) lagged far behind in terms of the volume of imports, followed by Argentina (3%) and Uruguay (2%). 

From 2007 to 2016, the U.S. (+75.3%) posted the highest rates of growth in terms of imports, but prior to 2012, supplies from the U.S. remained negligible. Conseqently, the share of the U.S. in terms of total imports increased by 75 percentage points from 2007-2016. By contrast, Argentina, which dominanted Colombian imports in 2007, and Paraguay dramatically lost their share in 2016, by -70 percentage points and -15 percentage points, respectively. 

Russia, Jordan, Curacao and Hong-Kong Constitute Major Foreign Markets for Colombian Beef

Colombia exported 10K tonnes of beef in 2016, which equated to $34.2M; this figure, however, accounted for less than 1% of the country’s output. The volume of exports was quite tangible prior to 2010, thanks to sizeable exports to Venezuela; these exports then ceased and the total figure fell abruptly that year to a negligible volume of 2K tonnes. The political tension between Colombia and Venezuela can be cited as the reason for this, caused in itself by apportioning blame to Venezuela for supporting illegal armed groups in Colombia. 

Exports then increased gradually through to 2016, with the only exception of a short-term peak in 2013. Since exports maintained only a small share in total output, they do not constitute a major driver of the beef industry.

In 2016, Russia (47% of total exports) constituted the main destination for beef exports, followed by Jordan (22%), Curacao (11%) and Hong Kong (6%). All these countries were not represented in the exports structure in 2007: after exports to Venezuela ceased in 2010, the geographical scope in terms of the foreign markets changed significantly.

Do you want to know more about the beed market in Colombia market? Get the latest trends and insight from our report. It includes a wide range of statistics on

  • beef market share
  • beef prices
  • beef industry
  • beef sales
  • beef import
  • beef export
  • beef market forecast
  • beef price forecast

Source: Colombia: Beef (Cattle Meat) - Market Report. Analysis And Forecast To 2025