Mexican beef exporters look to Muslim markets as US alternatives

Domestically produced Chinese beef is on sale at a supermarket in Beijing, on Friday. (AP)
Updated 13 May 2017
0

Mexican beef exporters look to Muslim markets as US alternatives

MEXICO CITY/CHICAGO: Mexico’s growing beef industry is targeting Muslim consumers in the Middle East for its prime cuts as it seeks to reduce dependence on buyers in the US.
The potential for a US-Mexico trade war under President Donald Trump has accelerated efforts by Mexican beef producers to explore alternative foreign markets to the US, which buys 94 percent of their exports worth nearly $1.6 billion last year.
Trump has vowed to redraw terms of trade with Mexico and Canada to the benefit of the US. Mexican beef companies fear they may be dragged into a renegotiation of the North American Free Trade Agreement (NAFTA) between the three countries.
That has firms looking to the Middle East, where most meat is imported from non-Muslim countries using animals slaughtered by the halal method prescribed by the Islamic law.
Mexico, the world’s sixth biggest beef producer, plans to quadruple exports of halal beef to 44 million pounds (20,000 tons) by the end of 2018 from 11 million pounds (5,000 tons) this year, according to data from AMEG, the Mexican cattle growers association.
The country should have 15 plants certified to produce halal meat by the end of next year, up from a current six, according to AMEG data.
Jesus Vizcarra, chief executive and owner of SuKarne, Mexico’s biggest beef exporter, said his company sees big potential for sales to Muslim-majority countries.
“We have to seek out more markets,” he said in an interview, pointing to near-term targets in Egypt, the UAE, Qatar and Lebanon.
“There is an opportunity in these Middle Eastern countries,” said Vizcarra, who is known in Mexico as the King of Beef and has boasted of being born in a slaughterhouse.
Mexico’s cattle growers’ association sent a trade mission to Dubai and Qatar in late February to meet potential buyers, said Rogelio Perez, AMEG’s top trade official.
Inspectors from the UAE will visit Mexico by June after Saudi inspectors were in Mexico in March, he said.
“They left with a very good taste in their mouths regarding Mexican production systems,” he said.
Plants must be certified as halal compliant by third-party companies such as US-based Halal Transactions of Omaha or UAE-based RACS.
Earlier this year, Indonesia, the world’s most populous Muslim country, expressed interest in buying Mexican beef for the first time although no deals have yet been cut.
Sales to Muslim countries would take a bite out of the market share for halal meat held by beef packers from the US and Brazil, according to industry and trade sources.
Mexico’s beef industry is able to grow its export markets due to a successful push to meet exacting US standards and modernize the sector over the past two decades.
That has put Mexican packers in a strong position to diversify away from the US market.
“It was our big strength until President Donald arrived, and now it is our major weakness,” said Bosco de la Vega, president of Mexico’s state farm council, adding that Mexico should limit beef exports to the US to a maximum of half the overall flow.
He said Mexico could do so in the next five years.
Russia is considering buying large volumes of Mexican beef and Mexico is also seeking to expand shipments to existing buyers like Japan and South Korea.
Mexico’s herd hit a record 31 million animals in 2015 and totaled 30.8 million in 2016, producing 4.142 billion pounds and exports of 712 million pounds.
Top exporters Brazil, India and Australia each export over 2.5 billion pounds.
“We are on the path of diversification,” Mexican Agriculture Minister Jose Calzada recently told reporters. “And we will not stop because these occasional insults from the US toward Mexico have opened our eyes.”


Global oil demand under threat from cleaner fuel

Updated 14 November 2018
0

Global oil demand under threat from cleaner fuel

  • Oil demand is not expected to peak before 2040, the Paris-based IEA said in its 2018 World Energy Outlook
  • The IEA’s central scenario is for demand to grow by about 1 million bpd on average every year to 2025

LONDON: Electric vehicles and more efficient fuel technology will cut transportation demand for oil by 2040 more than previously expected, but the world may still face a supply crunch without enough investment in new production, the International Energy Agency (IEA) said on Tuesday.
Oil demand is not expected to peak before 2040, the Paris-based IEA said in its 2018 World Energy Outlook. The IEA’s central scenario is for demand to grow by about 1 million barrels per day (bpd) on average every year to 2025, before settling at a steadier rate of 250,000 bpd to 2040 when it will peak at 106.3 million bpd.
“In the New Policies Scenario, demand in 2040 has been revised up by more than 1 million bpd compared with last year’s outlook, largely because of faster near-term growth and changes to fuel efficiency policies in the United States,” the agency said.
The IEA believes there will be about 300 million electric vehicles on the road by 2040, no change on its estimate a year ago. But it now expects those vehicles will cut
demand by 3.3 million bpd, up from a previous estimated loss of 2.5 million bpd in its last World Energy Outlook.
“Efficiency measures are even more important to stem oil demand growth: Improvements in the efficiency of the non-electric car fleet avoid over 9 million bpd of oil demand in 2040,” the IEA said.
Oil demand for road transport is expected to reach 44.9 million bpd by 2040, up from 41.2 million bpd in 2017, while industrial and petrochemical demand is forecast to reach 23.3 million bpd by 2040, from 17.8 million bpd in 2017.
All global oil demand growth will stem from developing economies, led by China and India, while demand in advanced economies is expected to drop by more than 400,000 bpd on average each year to 2040, the IEA said.
The IEA, which advises Western governments on energy policy, maintained its forecast for the global car fleet to nearly double by 2040 from today, growing by 80 percent to 2 billion.
On the supply side, the US, already the world’s biggest producer, will dominate output growth to 2025, with an increase of 5.2 million bpd, from current levels of about 11.6 million bpd. From that point onwards, the IEA expects US oil production to decline and the market share of the Organization of the Petroleum Exporting Countries (OPEC) to climb to 45 percent by 2040, from closer to 30 percent today.
New sources of supply will be needed whether or not demand peaks, the agency said.
“The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand. But meeting this growth in the near term means that approvals of conventional oil projects need to double from their
current low levels,” IEA director Fatih Birol said.
“Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million bpd from today to 2025, the equivalent of adding another Russia to global supply in seven years, which would be a historically unprecedented feat.”