The time when meat prices went up

Mongolians may wonder what happened to the meat coming from their 50 million heads of livestock as the costs of this year’s end festivities reached a new high and the New Year table required a budget higher than ever before. The reason? The mutton and beef meat used to make the buuz for Christmas cost respectively MNT3800 and MNT4200 for 1kg. For Tsagaan Sar (Lunar Calendar New Year), the price of one uuts (sheep sacrum) cost between MNT120,000 and MNT200,000; a price also never reached before.

The total amount of heads of livestock in Mongolia reaches almost 50 million, and the overpricing of meat which normally occurs in spring took place, for the first time, in winter. This sharp increase in the price of meat has caused Mongolians to think over why meat prices have sky high rocketed although they have a livestock of almost 50 million heads?

Mongolian livestock has increased year after year to reach 44 million in 2009. Therefore, Mongolians should have a right to think that the increase of their number of livestock would increase the domestic supply of meat, and product prices would be comparatively stable.  Nobody would think there would be a reverse correlation between the meat supply and the increase of the country’s livestock population. Because the price did not go down and the supply was not good, the capital city’s meat reserve – Mongolia stocks meat to counter inflation and meat shortages - was released for sale this January, two months prior to its normal March release. An act which led people to be concerned there might be a meat shortage in the coming spring, as the meat which should have been released then had been released in January.

The domestic meat price which was released embarrassed the country’s Prime Minister who decided to meet representatives from Meat Exporters’ Association and off was who work on Mongolia’s borders and customs to be briefed on the situation of the country’s meat market, supply and export. The Prime Minister inquired about the veracity of “rumors that the Erelian market in China was full of goat meat” and about the export status of Mongolian meat.  D. Tseveenjav, Chairman of the General Customs Office, answered that “26 thousand tons of meat were exported this year. 16 thousand tons were exported to the Russian Federation, Iran and Kazakstan and 10 thousand were exported to the People’s Republic of China. Among the 10 thousand tons, 1000 tons were for consumption in China, while the remaining 9000 were in fact destined for Vietnam. Having gained this information, it became clear why meat prices were going up in Mongolia’s domestic market although it has tens of millions of livestock. A look at these statistics is sufficient to see that large exports to Mongolia’s southern neighbor have largely contributed to increase the amount of meat exported by the country. But it is unlikely that only 1000 out of the 10,000 tons of meat exported had official addresses in China and the other 9000 tons had official addresses in Vietnam. The Capital City Governor’s Office ordered the Capital City Prosecutors Office, the Capital City Police Department and the Capital City Specialized Inspection Department to investigate why meat prices were not going down. The various organizations conducted the relevant inspections and according to the inspectors in charge, 30 railway containers full of meat had been located at the Zamyn-Uud border point, all registered under horse meat and with customs clearance, ready to cross the border. According to the custom clearance, the containers were not to be delivered in China but somewhere in Vietnam. However, some daily newspapers reported the news that a counterfeit customs clearance had been completed and there was no one to receive such a shipment in the Chinese border town of Erelian. Moreover, a relevant official told that the people in possession of a license to prepare horse meat in China had “changed” goat meat for horse meat. As a result, MNT60-70 million was pocketed from each container shipping “horse meat” south of Mongolia. The overpricing of the meat which occurred this winter was a direct repercussion of this scam.

Livestock is abundant in Mongolia, and the country has a clear will to export its meat. Meanwhile, its direct southern neighbour has a will to import meat. As such, it should be possible for both nations to realize their will. Nevertheless, neither China or Mongolia has an A on meat export and despite the fact a Veterinary and Quarantine Agreement - which is vital for countries exporting and importing meat - was signed between them, this agreement only concerned horse meat. Now, the inclusion of small cattle into the agreement has been required.

Asked about the illegal export of goat meat in large amount to China, an official answered that Mongolia wants China to conduct import according to the law by clarifying their export laws instead of resorting to smuggling, and that it is therefore necessary to conduct trade abiding by each other’s laws. At the moment, both actors play by disregarding the rules, even if the Chinese side has an interest in importing meat from Mongolia, and the Mongolian side has interest in exporting meat to China. Therefore, it should be logical to make the interests of both sides official.

By making official the export of small cattle destined to China, the two sides will be able to address the issue with more responsibility. Who will bear responsibility if an animal disease occurs from meat imported illegally by Chinese from Mongolia? If meat import and export becomes official, there will be a right for Mongolia to supply meat to China from its accredited export meat processing plants. And China will be able to send its specialists to the plants for regular monitoring.

Mongolia’s meat export sharply increased from 17,000 to 26,000 tons and will not stop with the interest of China alone. M. Lachinbal, Executive Director of the Mongolian Meat Producers’ Association, emphasized that “Demand for meat originating from Mongolian livestock will become high and a market for small cattle meat will soon open in Asia. When the Mongolian Prime Minister visited the gulf countries, Mongolia signed an Intergovernmental Agreement on Cooperation in the Veterinary and Quarantine Sector with Kuwait. Like Kuwait, the Emirates are also interested in Mongolian meat, and Iran has already started to import sheep meat from Mongolia. 1600 of the 26,000 tons of last year exported meat were exported to this country. Mongolia has also a permission to export horse meat to Japan and Vietnam has expressed their interest to import meat from Mongolia too. Mongolia has only the permission to export horse meat to China.”

Mongolia has been discussing meat exportation for the last 20 years. Over the last 20 years, Mongolia exported meat to the Russian Federation, mainly to Ulaan-Ude and Irkutsk and, never across the Ural Mountains. Mongolian livestock meat, which is considered as ecologically pure, was exported to its northern neighbor for industrial raw material use only. At present, new markets are opening for exportation of Mongolian meat. And many buyers, not just Russia, have arrived on the market, eager to buy Mongolian meat. In other words, a gate has opened to sell meat to other countries, other than Russia with whom Mongolia has a long tradition of exporting meat. Moreover, Mongolia is now exporting its meat for consumption use. Meat for consumption sells at higher prices than for industrial use. This also means that Mongolia now bears higher responsibilities. In order to export meat for consumption, the named product must comply with certain hygienic and sanitary conditions and rating from consumers associations. 

As meat is by nature bloody and has the property of absorbing the dust and dirt surrounding it, hygienic and sanitary conditions are crucial and must be paid extreme attention to. This is why Mongolia needs to reach the threshold of hygiene and sanitation required by those who are interested in importing Mongolian meat.  The times of having little or nothing to do to pass the Ural Mountains and reach the vast territory of Russia have gone. The time has come to pay attention to the issues from the herder herding his livestock to the law making, passing by enforcement organizations, including meat plants and relevant ministries and agencies. As specialists in the field say, it is necessary to employ the right technology when it comes to primary meat processing in order to satisfy the demand. But everybody knows what level the primary processing of meat in Mongolia is at nowadays. There are today only a few high capacity meat processing plants in Mongolian territory as only 10 percent of the country’s total meat consumption is being manufactured. The meat export new trend means the time has come to revolutionize the food industry in Mongolia.
    The time for Mongolian meat to bear the attribution “free range” and to be sold at higher prices is near.