China Virus Could Be a Boon for Mexican Cattle Exports
The China virus has caused havoc in the Chinese economy and domestic production of beef has plummeted. This has presented an opportunity for cattle-producing nations such as Mexico to help meet Chinese demand.
Kenny Fisher, FXEmpire
Feb 06, 2020
The China virus has severely disrupted China’s economy and caused turmoil in global financial markets. Chinese stock markets and the Chinese yuan are down sharply, and the ban on Chinese travelers imposed by many countries will have a significant impact on the global tourism industry. With most Chinese businesses closed, the outbreak has caused turmoil throughout the country, which boasts the second-largest economy in the world.
At the same time, the coronavirus represents opportunities for other countries. Chinese citizens may be restricted from working or traveling, but they still need to eat. The city of Wuhan, which is where the coronavirus is suspected to have originated, is the capital of Hubei province. Officials have severely resisted movement in Hubei, which is a key food-producing area. The travel limits have also restricted the movement of animals and reduced the production of feed at mills and other facilities. As a result, domestic production of meat has been sharply curtailed.
China is scrambling to find alternatives, and Mexico, with its huge cattle industry, could fill some of the void. Mexican officials are forecasting that sales of steaks and other meats to China will rise sharply – currently, only 4 percent of Mexican meat exports are sent to China. However, the Mexican cattle industry is projecting a 40% jump in sales in 2020, of which one-third will come from China. An increase in exports would be bullish for the Mexican peso...