Brazil's meat exports have dropped markedly

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 drive down prices on the world market.

Brazil's exports were hit hard in October by Chinese business inactivity. This is evidenced by the current industry figures provided by the Association of Brazilian Beef Exporters and the Association of Brazilian Cold Storage Operators (Abrafrigo). According to the report, a total of about 108,000 tons of processed and unprocessed beef were exported from the South American country in the reporting month, down 49% compared to September and 43% compared to October 2020. The associations estimate the value of exports at 541 million US dollars (467 million euros) 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 "residual exports" in the amount of 27.7 thousand tons of beef were shipped last month. ABIEC reports that China ranked fourth among buyers in October behind Hong Kong, Chile and the US. Back in August, China was the main buyer of Brazilian beef in the global market, accounting for 58% of the total export of 210,000 tons. Then, in September, exports to China were suspended under health protocols agreed between the two countries due to 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, business has been dormant for several weeks, despite Brazil's clear pressure on Beijing. The Brazilian government has repeatedly stressed that atypical cases of BSE have not led to any change in BSE risk status. Market watchers explain the fact that China, however, 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 pushed down global meat prices, which had previously risen steadily since October 2020.