Beef exports to China may fall by 10% if sales to China do not resume

Brazil has not been exporting beef to China for the last six weeks after two atypical cases of ‘mad cow disease’ were registered. With no expectation of an official position from the Chinese government, the Brazilian sector is already feeling the impacts on the domestic beef market, a scenario that could also extend to the foreign market, according to the market analyst at AGRIFATTO, Yago Travagini.

“We had a scenario before and after the Chinese blockade. Before the embargo, we were on our way to exceeding the volume of meat exported in 2020, with an increase of up to 4%, while revenue could grow up to 20%. But without the exports to China, the export volume will decrease. We will probably have a drop in the range of 8% to 10% in beef exports”, he stated.

Also according to Travagini, the scenario would have been much worse for Brazil had China not exported high volumes of beef in the first nine months of the year.

See below a history of Brazilian beef exports since 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)

Decreased Chinese imports affect beef prices

In addition to exports, the absence of China in the Brazilian beef market caused a significant drop in live cattle prices.

“China is responsible for up to 60% of our exports, or 15 to 20% of our production in 2021. Therefore, when it leaves the market, it is normal for us to feel this absence. We now observe that prices have returned to a reference for the domestic market. If before we could get R$305 or R$310 per arroba, it was because the export market was strong and paid more. However, today the domestic market is determining prices. Prices are holding at R$265 to R$270.

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