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
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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.”


‘Huge increase’ in crude prices not expected: IEA executive director

Updated 19 July 2019
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‘Huge increase’ in crude prices not expected: IEA executive director

  • The International Energy Agency is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day
  • IEA’s Fatih Birol: Serious political tensions could impact market dynamics

NEW DELHI: The International Energy Agency (IEA) doesn’t expect oil prices to rise significantly because demand is slowing and there is a glut in global crude markets, its executive director said on Friday.
“Prices are determined by the markets ... If we see the market today, we see that the demand is slowing down considerably,” said IEA’s Fatih Birol, in public comments made during a two-day energy conference in New Delhi.
The IEA is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Birol told Reuters in an interview on Thursday.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd. But in June this year it cut the growth forecast to 1.2 million bpd.
“Substantial amount of oil is coming from the United States, about 1.8 million barrels per day, plus oil from Iraq, Brazil and Libya,” Birol said.
Under normal circumstances, he said, he doesn’t expect a “huge increase” in crude oil prices. But Birol warned serious political tensions could yet impact market dynamics.
Crude oil prices rose nearly 2 percent on Friday after a US Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows.
Referring to India, Birol stressed the country could cut its imports, amid rising oil demand in the country, by increasing domestic local oil and gas production.
Prime Minister Narendra Modi had set a target in 2015 to cut India’s dependence on oil imports to two-thirds of consumption by 2022, and half by 2030. But rising demand and low domestic production have pushed imports to 84 percent of total needs in the last five years, government data shows.
Meanwhile, the IEA doesn’t expect a global push toward environmentally friendly electric vehicles can dent crude demand significantly, Birol said, as the main driver of crude demand globally has been petrochemicals, not cars.
He said the impact of a serious electric vehicle adoption push by the Indian government would not be felt immediately.