MercoPress. South Atlantic News Agency

China deals blow to Brazilian economy by holding import ban on meat

The price of meat went down for Brazilian consumers

China's decision to uphold a ban on meat imports from Brazil means US $ 450 million less for the coffers of President Jair Bolsonaro's administration, it was reported Wednesday. It was also good news for Uruguay.

With Argentina gradually recovering from a presidential export ban, Uruguay is said to have seized most of the opportunities stemming from the new Chinese scenario.

Argentina's Agriculture Minister has in recent weeks authorized monthly quotas of between 50 and 100 tons for exporting meat packs, which has restored the price of canned and manufactured beef at Buenos Aires' main slaughterhouse.

According to public and private estimates, Argentine exports will close 2021 at 770,000 tons, below the record 920,000 tons exported in 2020.

Traders believed Wednesday that under the new conditions there would also be a price increase of up to 20%, driven by the lower availability of animals at this time of year.

“Uruguay capitalized on the situation and exported 35% more than last year,” explained Francisco Ravetti of the Argentine Consultora AZ Group.

Meanwhile, Brazil's Foreign Trade Secretariat has reported meat exports fell 43% compared to the previous month. After a poor start to the year, sales rebounded and registered exceptional figures in August and September.

The Rosario Livestock Market (Rosgan) estimated Wednesday that China has cut down imports of all meats by 17%, although projections for Chinese demand in 2022 are favourable.

Brazil's mad cow cases were detected on Sept. 4 in Minas Gerais and Mato Grosso, which meant bad news for exporters but good news for domestic consumers, who saw a decline in retail prices, according to Folha.

With China off the trading table and local consumers with limited purchase power, local prices have reached their lowest value since February in the Greater Sao Paulo area, it was reported.

While the Ministry of Agriculture, Livestock and Supply has instructed meat processing plants to suspend any new product for the Chinese market, Minister Tereza Cristina has offered to travel to Beijing to negotiate in person the lifting of the sanctions.

According to Folha, China and Brazil are studying each other before taking new steps. The Chinese, after buying 220,000 tons of Brazilian beef between August and September, in addition to paying high prices, are still evaluating when to return.

Analysts were also speculating on how long would China be able to keep the ban or if suppliers from elsewhere would be able to match the quantities purchased from Brazil, even under China's current economic slowdown.

At the same time, Brazilian producers are having their costs upped since they now need to feed and accommodate cattle that was supposed to have been already slaughtered.