China Investigates Beef Imports; Abiec Says Nothing Changes for Brazil

The Ministry of Commerce announced on Friday (27) that China will investigate beef imports. The world’s largest beef importer and consumer faces an oversupplied market that has driven domestic prices to multi-year lows.

Any trade measures to reduce beef imports would affect China’s largest suppliers, including Brazil, Argentina, and Australia.

However, according to the Brazilian Beef Exporters Association (Abiec)—which represents companies like JBS, Marfrig, and Minerva operating in Brazil and other countries, including the United States—this is not expected to happen in the short term.

The Chinese investigation will focus on imports between January 1, 2019, and June 30, 2024, the ministry said in a statement. It added that the probe was initiated following a request from the China Animal Husbandry Association and other livestock industry groups.

Abiec President Roberto Perosa says the investigation does not currently affect Brazil’s exports. Brazil is the world’s largest beef exporter and China’s leading supplier, accounting for approximately half of the Asian country’s beef imports.

“This is a long-term matter, with decisions expected in about a year, as the document specifies an eight-month investigation period that can be renewed. It’s impossible to conduct such a comprehensive study within eight months given the required information volume,” Perosa told Reuters.

“So nothing changes today; everything continues as usual,” he emphasized, noting that the Chinese move should not impact beef or cattle prices.

The Brazilian Association of Meatpackers (Abrafrigo) stated that “the beef trade with the Asian country will proceed normally. “

According to customs data, China’s total beef imports reached $14.2 billion in 2023, up from $8.2 billion in 2019.

Brazil accounted for 42% of the total trade value, followed by Argentina with 15% and Australia with 12%.

From January to November 2024, Brazil exported 1.21 million tons of beef to China, an 11% increase year-over-year, according to data released earlier this month by Abrafrigo. The Asian country accounted for just over 40% of Brazilian beef exports during this period.

Perosa explained that China’s beef market revolves around 12 million tons, while imports from all countries total 2.5 million tons annually, with Brazil supplying about 50%.

“I believe this is an effort to address demands from Chinese domestic producers, as China does not currently have the production capacity to meet its consumption needs. If consumption grows, it will only worsen its inability to meet demand,” he said.

The chart below builds on DataLiner data, a Datamar-powered maritime intelligence tool. It shows Brazil’s exports of meat products to China in TEUs between January 2021 and October 2024.

Meat Exports to China | Jan 2021 – Oct 2024 | TEUs

Source: DataLiner (click here to request a demo)

Possible Consequences

Perosa mentioned the imposition of quotas and higher tariffs on volumes exceeding those quotas among potential outcomes of the investigation.

“This could result in something similar to what happened with Australia. After a year, they established a quota, and above that quota, the tariff increased,” he noted.

Brazilian beef imports to China are subject to a 12% tariff.

“For example, they could hypothetically set a quota of 1 million tons, and anything above that would incur a 20% tariff,” Perosa speculated.

He reassured the market that the investigation is unrelated to dumping—which could have more severe consequences—and instead concerns safeguards.

“It’s a reasonable process, a country’s right to evaluate such matters, and we are ready to cooperate,” he said.

When asked whether the investigation could interfere with new approvals for Brazilian meatpackers to export to China, he said it would not.

“This changes nothing; they are separate issues.”

The Chinese Ministry of Commerce emphasized that the investigation is not targeted at specific countries or regions, does not distinguish product origins, and will not affect regular trade while it is underway.

“It’s too early to assume any significant impact on Brazil,” said Itaú BBA in a report, noting that China’s bargaining power in the sector appears to be weakening as its domestic cattle production declines. At the same time, Brazil continues to expand exports to the United States.

Cooperation

The Brazilian government said it would work alongside the export sector to “demonstrate that Brazilian beef exported to China does not harm the Chinese industry and, on the contrary, complements local production.”

The government stressed that “there is no initial adoption of any preliminary measures, and the current 12% ‘ad valorem’ tariff on beef imports remains in effect.”

Brazilian beef exports are at record levels this year, with total shipments expected to exceed 3 million tons, according to official data cited by Abrafrigo, which reported a 30% increase from January to November.

Revenues from Brazilian beef exports to all destinations have already surpassed $12 billion, up more than 23%, while China’s imports totaled over $5.4 billion for the year through November (+3.4%).

Industry Challenges

According to the ministry, the Chinese producers who requested the investigation argued that a sharp increase in import volumes during the period had “seriously harmed” the country’s domestic industry.

Customs data shows that China’s beef imports in 2023 were nearly 65% higher than in 2019, and imports in the first half of 2024 more than doubled compared to the first half of 2019.

Meat prices in China, including pork, beef, and poultry, have dropped as consumers face a slowing economy and cut back on spending.

“Most cattle farms in China are operating at a loss,” the China Animal Husbandry Association said in a report published in state media.

The association noted that beef prices have fallen to their lowest level in five years, while live cattle prices are at a 10-year low.

According to the Ministry of Agriculture, wholesale beef prices dropped 22% to 59.82 yuan ($8.20) per kilogram in late December, down from 77.18 yuan two years ago.

In June, Beijing sought to curb price declines by urging farmers to optimize and reduce cattle herd sizes. Still, prices have continued falling amid a surge in imports, particularly from Argentina.

Imports from the South American producer during the first 11 months of 2024 rose 10% year-over-year to 533,005 metric tons.

“The sector reflects that excessive beef imports have caused substantial damage to China’s cattle industry,” the China Animal Husbandry Association stated.

“The sector strongly urges the government to implement controls on beef imports to protect farmers’ livelihoods and the industry’s security,” it added.

Analysts said China is also reportedly considering trade restrictions on dairy and pork imports from the European Union. However, these investigations respond to the EU’s planned tariffs on Chinese-made electric vehicles.

Source: CNN Money

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