F2C interview Martin ALVEZ Consul-General of URUGUAY in Guangzhou for the current food export situation of Uruguay to China.
Q: What are the main food products exported from Uruguay to China? And how about the proportion of them?
A: For the time being, the first product that we export to China related to food is soybean. China has more than 80% of our exports, and the rest of the exports are distributed among European countries and some Middle Western countries. So in a sense, it’s like a monopoly for our exports of this product to China. Then, of course, we have beef which is the star products of our economy. 40% of the beef exported by Uruguay have China as its destination. So once again, you are the biggest market for Uruguayan beef. The rest of 60% of our exports are distributed among 180 countries in the world, mostly European countries, and U.S., but not only those countries, with all the other countries in Asia, Africa, Latin America as well. We have export destinations in 180 countries. Normally, six or five years ago, Russia used to be our biggest client. But since Russia is struggling right now with their economy, they are not able to afford the prices of the Uruguayan beef. So now it is China that is the main market, alongside with the European Union. They are both markets that have the economic resources to pay the prices of Uruguayan beef.
Then we have some other products, such as dairy products. When we talk about dairy products, we talk about milk, we export to China milk powder and liquid milk, and some other products. You can’t find them in the shop and in the supermarket, but you can find them as ingredients in the final products here in China. We are working with this company and other companies in the dairy sector in order to make the Uruguayan brands more acknowledgeable and more famous here in the market.
Then we have small experiences that we are trying to foster in the Chinese market blueberries and citrus.
Q: China is now the largest importer of Uruguay beef, but for Chinese consumers, they are more familiar with beef from Australia, Canada or the United States. What do you think is the main reason of it?
A: The answer can be very simple, but also very complicated. It depends on how you analyze the situation. In 2017, Uruguay was the main beef supplier in China. According to the current statistics, we are still going to be the main supplier for the second year in a row. So as I said before, the business is under the track but just Uruguay hasn’t been introduced to the Chinese consumers. First, we have to make a physical presence in China, which we didn’t have for as long as the US, Australia or New Zealand. Australia and New Zealand have been working with Chinese consumers for 20 years now since they have FTA with China. The United States don’t have it, but they’ve always been active here with the right marketing. Our country hasn’t done that work yet, so this is the process of growing and migration of the beef sector in Uruguay. The big producers in Uruguay thought that “okay, the quality of our products is the highest. I have the best beef, so the marketing will be done by itself. Quality speaks by itself. But after then, they have learned that it does not work like that. The advantages would be no use if you didn’t conduct the right marketing strategies, spend enough money on publicity, try to work with social media influencers or you were not physically in China. You need to orient the consumers’ taste and catch their attentions. It’s all about communication.
So when people think of beef, they think of the US, Australia, New Zealand, European Union, Ireland, for example, a very strong player in beef market, but they don’t think of us. That’s on us and we have to work on that. That’s why the Consulate General is trying to reach associations and companies such as yours, in order to fix that problems and communicate with the Chinese consumers that Uruguay is in China and Uruguay is a long standing friend of China. We have been in diplomatic relations for 30 years now, and this year is the 30th anniversary of diplomatic relations. That’s why we’re having Uruguay Week in the main cities of China. I believe the first event of Uruguay week in China will be held here in Guangzhou. If it goes really well, we will inaugurate the Consulate General by the end of August. The Minister of Foreign Affairs of Uruguay is coming by the end of August for the inauguration. As a matter of fact, 25th of August is our national day as well. So we can combine inauguration, national day, marketing events for Chinese importers and influencers. There will be wine and beef tasting, so people can know at least what Uruguay is able to offer not only to the south of China, but also to the whole country.
Q: What are the advantages of Uruguay beef?
A: As you may know, we have very high-quality beef. We don’t have that much of production. We have a decent amount of production that is of very high quality. So that’s a difficult combination because our final prices are always quite high but what we offer is not that big. The reason why our beef is so good is we have been working for 50 years to cross breeds in order to have a better gene pool for our cows. Normally, we work with the British breeds. We try to cross it as smart as we can in order to have the better genes and in order to have the better combination of muscle, bone and quality, etc. So we’ve been working for 50 years to have one of the best gene pools available. That’s why our beef’s quality is so high.
Another element that helps our exporters to locate our beef abroad is that we are the only country in the world that has the single traceability of each single animal be slaughtered in the slaughter house. Then we transform the beef and have it exported. When you go to the countryside in Uruguay, you would see that every single cow has two earplugs.
In one earplug, you can find a chip which contains a number. The number belongs to each animal, so you don’t have two numbers in the whole country. Just one number for one animal. In other earring, you just have the number in case the cow loses one of the earplugs. In regard of safety and traceability, we are able to provide as much information as possible to the Chinese consumer. If the Chinese consumer wants to know the whole process since the cow was born till death, when the bucking is done and when the container is shipped from Uruguay to China, you can know it just by scanning the QR code or bar code in the supermarket. Those are the reasons why the Uruguayan beef is so much appreciated in high quality markets.
Q: How do you understand the imported food market in Southern China?
A: In 2017, the president of Uruguay, Tabaré Vázquez, visited Beijing, Hainan and Guangzhou. When he was in Guangzhou, he told everyone that Uruguay is open to new negotiations with the Ministry of Commerce of China, in order to achieve free trade agreement. Uruguay is undertaking consulting process with the rest of Mercosur countries, because we are really hoping for a FTA (free trade agreement) with China. We are talking with the Mercosur countries and China is waiting for that process to end. Also when Minister Wang Yi was in Uruguay this January, he kindly requested Uruguay to lead the One Belt One Road initiative in South America. The Minister of Uruguay, Rodolfo Nin Novoa, told your minister that Uruguay would be delighted to be the first country to sign the One Belt One Road initiative, which is the first step to move forward. That’s another reason why we are opening this consulate general in Guangzhou, because for us, all our export goes to the south of China. So it’s only logical to have a presence where all your production is getting to.
Basically since Guangzhou is the trade capital of China, businessmen here really know their business and they really know how to distribute all the food that comes to the ports of Guangdong. No matter which port, every single port is important to us. And they managed to get the product from Shenzhen or Guangzhou directly to the north of China. That’s an excellent thing. I congratulate the businessmen from Guangzhou to get the distribution process so smoothly done in such a huge country.
Q: What's your expectations to our association or Food to China?
A: You have no interests on your own other than getting people to know each other. You don't have an agenda. You don't have your own company to support. You're just an association of Chinese importers and exporters open to the world, focusing on the overseas market. If you don't have it now you will have it tomorrow. In China you can't avoid it. Something you need to have in order to be prosperous and make it easier for everyone. It's not easy for Chinese to get to know Uruguay people. We have a huge gap between us. As I said before, the globalization is making the gap much easier to deal with.
You are an association which has a long history. You have very strong members. You have shown to the Consulate General that you are very serious and you have been doing this business for a long time. You have a lot of members on your back and they are very serious as well. For me as a part of the government, I can tell my businessmen that although there are some companies offer you the same service, please just work with the associations that I can recommend. We can introduce to your other companies that you can do business with.