Chinese demand drop drives 29% decrease in Brazilian beef export earnings

The Brazilian Association of Meatpackers (Abrafrigo), drawing upon data from the Ministry of Development, Industry, Commerce, and Services (MDIC), has shown that revenue from beef exports experienced a 29% decline in July compared to the same month last year, while the volume increased by 1%.

The sales of both “in natura” and processed products generated revenue of US$ 877.1 million (in comparison to US$ 1.229 billion in July 2022) and a volume of 205,612 thousand tonnes (in contrast to 203,592 thousand tonnes). According to the governmental body, the year-to-date exports resulted in US$ 5.811 billion (-22%) and 1,282,066 tonnes (-0.55%).

Looking back a year, China, the main buyer of Brazilian beef, purchased 111,945 tonnes, resulting in US$ 786.22 million in revenue. In the same month this year, meat purchases totaled 93,691 tonnes, generating $447 million in revenue. During the first seven months of 2022, Chinese purchases contributed US$ 4.462 billion in revenue and 654,686 tonnes. However, revenue fell to US$ 3.059 billion (-31.5%) in 2023 while handling 611,987 tonnes (-6.5%).

The reduced demand from China has translated to lower beef prices in the international market. Abrafrigo’s note mentioned that from January to July, average export prices progressively decreased month by month: 8.66% in January, 14.86% in February, 21.15% in March, 24.88% in April, 20.35% in May, 28.97% in June, and 29.38% in July, all in comparison to the respective months of the previous year. The entity further stressed that the appreciation of the Brazilian real against the dollar has also left a mark on revenue.

After China, the United States stood as the second-largest purchaser of Brazilian beef from January to July, escalating their purchases from 115,536 tonnes in 2022 to 142,662 tonnes in 2023, marking a 23.5% increase. Nonetheless, revenue experienced a 12.3% dip, declining from US$ 636.4 million in 2022 to US$ 557.8 million in 2023. Chile secured the third position with 57,199 tonnes (+36.3%) and revenue of US$ 280.8 million (+30.4%).

Abrafrigo pointed out, “Hong Kong has expanded its beef purchases this year and currently ranks fourth among the top 20 importers. In 2022, they acquired 55,915 tonnes with a revenue of US$ 198.7 million. In 2023, purchases increased to 63,831 tonnes (+14.2%), with revenues of US$ 196.7 million (-1%).”

Egypt holds the fifth position, with imports totaling 45,908 tonnes (-41.6%) and revenues of US$ 160.8 million (-46.6%). The entity noted that 67 countries exhibited an increase in imports, while another 94 reduced their purchases.

Source: BroadCast Agro

To read the original news report, visit: http://broadcast.com.br/cadernos/agro/?id=VGw1VUtVZ1Fka3BQR1M5MVRRY0U5Zz09

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