The Chinese market, which was driving the global beef trade in late 2019, now faces added uncertainty because of the impact of the coronavirus.

The beef trade had already been facing a correction following oversupply in November and December, ahead of the Chinese New Year at the end of January.

Despite reports of deals not being honoured or renegotiated in January, there was an expectation that trade would resume at a lower price level at the end of the New Year celebrations and into March.

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This has now been knocked off course because of the Coronavirus.

It has led to an extension of the New Year holiday break, which is similar to the Christmas season in providing an already extended winter break.

Economy

Coronavirus has affected the entire Chinese economy, with the Shanghai index falling 8% on the first day of trading this week after the extended holiday.

This creates a nervousness among importers and is reflected in a huge drop in beef supplies being despatched, particularly from South American countries.

In the case of Uruguay, beef deliveries to China in January were half of what they were in January 2019 and the lowest in two and a half years, according to the World Beef Report.

The virus has added to what was already a disrupted market in China.

Irish factories

Irish factories are not yet up to full supply speed for China, as approval was only secured in October 2019 for the majority of factories.

However, there are concerns that the problem in China could lead to increased volumes of South American beef, distorting other markets.