Minerva could become the world’s largest supplier of beef to the Chinese market if Brazilian authorities of the Administrative Council for Economic Defense (Cade) approve the acquisition of Marfrig’s meatpacking plants. Sources and analysts consider the company’s consolidation in this market a given but still question whether it is the right moment.

“The company will become as large as JBS in Latin America. However, looking at the Chinese market, it may take the top spot due to the operations in Argentina and Uruguay it is inheriting from Marfrig,” stated a source from a competing meatpacking company.

Within the industry, word has it that employees from the meatpacking plants acquired by Minerva have already started looking for other employment opportunities, fearing job loss amid the changes.

“The perception among the workers is that [the sale] has already been successful,” says the source. When contacted, Minerva chose not to provide a comment until Cade’s decision.

One concern in the market is whether Minerva would be able to negotiate better prices per ton of exported meat given its prevalence in the trade with China.

Some sources in the industry view China’s new inspections of Brazilian meatpacking plants as a signal that the country will have alternative options to balance the equation. “In the queue [for inspections] are massive JBS plants, such as those in Campo Grande, Diamantino, and Redenção. So, what we say today about China can change tomorrow,” notes another industry source.

The chart below compares containerized exports of beef and pork from Brazil to China between Jan 2019 and Nov 2023, according to data obtained with DataLiner, which is Datamar’s maritime intelligence service.

Beef and Pork Exports to China | Jan 2019 – Nov 2023 | WTMT

Source: DataLiner (click here to request a demo)

According to Leonardo Alencar, an analyst at XP Investimentos, there is no public data on all beef exporters globally, but considering the volumes the company already exports in South America, saying that Minerva may become the world’s largest supplier is not farfetched.

However, the XP analyst points out that the drop in prices paid per tonne exported to the Chinese market was expected.

For him, Cade’s approval will be decisive for Minerva’s plans moving forward. If granted permission to conclude the acquisition in early Q2, the company will be able to direct its plants to capture opportunities in Brazil generated by the ample supply, which is expected to begin decreasing in 2025.

Source: Globo Rural

Click here to read the original news text: https://globorural.globo.com/pecuaria/boi/noticia/2024/01/minerva-pode-virar-maior-fornecedora-de-carne-da-china.ghtml

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