The ban on the supply of beef to the Chinese market has hit the Brazilian livestock industry hard. There are fears that China is doing this to lower prices on the world market.

Brazil's exports were hit hard in October by Chinese business inaction. This is evidenced by the current industry figures presented by the Association of Brazilian Beef Exporters and the Association of Brazilian Refrigerated Warehouse Operators (Abrafrigo). In the reporting month, the South American country exported a total of about 108 thousand tons of processed and unprocessed beef, which is 49% less compared to September and 43% compared to October 2020. The associations estimate the export value of US $ 541 million (€ 467 million) for October 2021, which is about 54% less than in September. Compared to October 2020, this is 31% less.

Abrafrigo attributed the drop in supplies to the cessation of imports to China. Only the "residual export" of 27.7 thousand tons of beef was shipped last month. ABIEC reports that China ranked fourth among buyers in October after Hong Kong, Chile and the United States. Back in August, China was the main buyer of Brazilian beef in the world market, which accounted for 58% of the total export of 210 thousand tons. Then, in September, exports to China were suspended under health protocols agreed between the two countries following the discovery of two atypical cases of atypical bovine spongiform encephalopathy (BSE) in Brazil.

Exports were suspended for 13 days in a similar case in 2019. In the current case, the business has been dormant for several weeks, despite clear Brazilian pressure on Beijing. The Brazilian government has repeatedly stressed that atypical BSE cases did not result in any change in BSE risk status. Market watchers explain the fact that China nevertheless continues to keep the border closed, intending to lower the price. And this strategy is likely to be successful. According to the Food and Agriculture Organization of the United Nations (FAO), the slowdown in meat imports from China since August has led to a decline in world meat prices, which had previously risen steadily since October 2020.

Source: meatinfo