Without exporting beef to China, Brazilian slaughterhouses cut back

Brazilian slaughterhouses are reducing operations amid the interruption of their exports to China and the reduction in domestic demand for beef.

Half of the slaughter capacity of the world’s largest beef exporter was idle in September, according to Jessica Olivier, an analyst at Scot Consultoria.

The pace of slaughtering has slowed down since last year and, in September, idle capacity in slaughterhouses reached the highest level ever recorded.

The Brazilian government voluntarily suspended beef exports to China early last month after two cases of mad cow disease were detected.

Although the World Organization for Animal Health declared that the cases posed no risk, China has not yet authorized the resumption of shipments.

Other importers that could absorb the excess supply, such as Egypt and Saudi Arabia, also stopped buying in response to the mad cow episode.

See below a history of Brazilian beef exports from 2018. Data are from DataLiner:

Brazilian Beef Exports (HS 0202) | Jan 2018 to Aug 2021 | WTMT

Source: DataLiner (To request a DataLiner demo click here)

The strong demand for meat in the US has helped, with the country increasing purchases by Brazilian slaughterhouses by 200% this year. But volumes are low compared to the Asian country.

“Not having China as an importer is a very strong blow,” said Wagner Yanaguizawa, an analyst at Rabobank Brasil, in a telephone interview. “Brazil’s beef dependence on China has increased a lot.”

About 60% of Brazilian beef exports had China as their main destination until September this year.

Source: Money Times

To read the full original article, visit the link: https://www.moneytimes.com.br/sem-exportar-para-china-frigorificos-reduzem-abate/

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