Government proposes quota allocation and quarterly export limits for beef shipments to China

Brazil’s Agriculture Ministry has proposed distributing the country’s beef export quota to China among domestic meatpackers in proportion to their recent sales history, along with implementing quarterly shipment caps within the annual allowance.

The proposal was outlined in a letter sent Friday (Feb. 6) to the Foreign Trade Chamber (Camex), calling for the urgent creation of a Brazilian system to manage beef export quotas to China. The ministry warned that the absence of state regulation could ultimately lead to plant closures and reduced investment in the cattle sector.

In the document, the ministry said the operational details of the system would be set out in a specific regulation to be drafted by the Ministry of Development, Industry, Trade and Services. It suggested baseline criteria to guide the allocation of export licenses within the 1.1 million-tonne quota granted by China, which is expected to increase slightly in 2027 and 2028.

Under the proposal, quota volumes would be distributed among beef exporters in proportion to their recent export performance. Allocation would be made by company tax ID (CNPJ), based on each exporter’s share of beef sales to China in 2025. The ministry argued that this approach would reflect companies’ effective production and slaughter capacity, compliance with sanitary requirements and established commercial relationships.

The ministry also proposed mechanisms to include new and smaller exporters, including the creation of a “technical reserve” within the overall quota and the establishment of a minimum allocation per eligible company. The measure would ensure at least limited access to the Chinese market for smaller processors and new entrants, without compromising efficient use of the quota.

Another recommendation is to distribute the annual quota across quarterly periods, with monitoring and reallocation of unused volumes after defined milestones. The goal, according to the ministry, is to maximize use of the quota and avoid unused balances at year-end.

To control shipments, the proposal предусматриes the use of export licenses (LPCOs) within Brazil’s Integrated Foreign Trade System (Siscomex), linked to maximum volumes per company and period and tied to Single Export Declarations (DUEs). The ministry also called for an automatic block on shipments exceeding authorized volumes to ensure legal certainty and predictability for exporters.

The letter further recommends establishing clear rules for plant eligibility, conditions for loss or reduction of quota — such as non-use or sanitary non-compliance — and procedures for reconsideration and appeals.

The ministry suggested that quota volumes be adjusted in line with any increases authorized by China in 2027 and 2028 or future expansions of the overall limit. It said it stands ready to help draft complementary regulations, particularly regarding sanitary requirements, plant eligibility and monitoring of export flows.

A source in Brasília familiar with the matter said there are no viable alternatives to address China’s safeguard measures without cooperation from Beijing. Without state regulation, the source warned, international beef prices could come under pressure, affecting the entire livestock supply chain.

The ministry stressed the urgency of adopting the measure to provide clarity for contract negotiations and shipment planning throughout the year. The same source said that if the issue is not approved Thursday (Feb. 12) by Camex’s Executive Management Committee (Gecex), it will become “very difficult” to control exporters, and the quota could be exhausted quickly.

The source acknowledged that the issue is sensitive and requires careful legal grounding, as it could be interpreted as an export restriction and face court challenges. “It is a complex matter and could be contested legally. On the other hand, doing nothing would certainly harm the sector. The Camex resolution must be very well founded, showing it is a response to a foreign measure,” the source said.

In its letter, the Agriculture Ministry argued there is legal basis for creating an export control mechanism. Industry representatives have previously presented the government with models and precedents that they say would provide “legal comfort” for adopting such a system.

According to the ministry, the quota mechanism is supported by the federal government’s constitutional authority over foreign trade and customs policy, as well as Law 5,025/1966, which allows for export restrictions in the national interest and for distributing limitations among stakeholders.

The ministry also cited Decree 11,428/2023, which assigns Camex responsibility for formulating and coordinating foreign trade policy. Administratively, the quota system would serve as a “necessary instrument to manage, in an orderly manner, the exogenous shock imposed by the Chinese safeguard.”

According to Datamar, China currently accounts for 56% of Brazil’s beef exports. This level of market concentration is prompting the national industry to seek alternatives to mitigate the challenges posed by new Chinese export quotas.

The following chart provides a month-over-month comparison of Brazilian beef shipments (in containers) to China from 2022 through 2025, based on data from Datamar’s DataLiner platform

Beef Exports to China | Jan 2022 – Dec 2025 | TEUs

Source: DataLiner (click here to request a demo)

In the letter, the ministry warned that maintaining a fully unregulated export regime could trigger a “disorderly race” among Brazilian exporters to secure access to the annual Chinese quota, with accelerated shipments and pressure to close contracts under unfavorable terms.

Such a scenario, it said, could lead to a “sharp and artificial” drop in export prices due to competition among domestic processors for space within the quota, raising the risk of depressed “fire sale” pricing not only for China but also in alternative markets where Brazil competes with other major exporters.

Ultimately, the ministry warned, the lack of regulation could trigger cascading effects on cattle producers, jobs and income in livestock-dependent regions, with potential plant closures and reduced investment in slaughtering, processing and logistics.

Source: Globo Rural

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