December 9, 2022

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The beef market is waiting for the Chinese position at the alarming moment

The beef market in Brazil is going through a turbulent moment after exports to China, a major importer, were suspended. Sales have not taken place since the beginning of September, after Brazil confirmed two separate cases of “crazy cow disease”, so far, there is no forecast of when exports will resume. Animal Health Organization (OIE), Considers this to be an insignificant risk for disease in Brazil.

From October 1 to 7, Asians have halted part of their activities to celebrate China’s National Day, with fears that exports will not resume until the end of September.

Safras & Mercado, a consulting firm, told Fernando Iglesias that the lack of a Chinese market for beef exports was bad for butchers and farmers. “The situation is so complicated that the slaughterhouses need to rearrange the slaughter tables and still feel the impact of logistics costs because cold rooms are waiting to be dispatched,” he pointed out.

Stopping meat exports to China is not fair, says market analyst Photo: Abik

Responsible for beef production, the farmer also feels the impact of the natural decline in sales. “This animal that is going to be killed is nutritious, and when this type is finished, the cost of nutrition is high. Every day is an additional expense for the producer, “said Iglesias.

According to the analyst, there is no justification for the disruption to beef exports because the health issue has already passed. He says the sector is surprised by China’s lack of an official position, which leads the market to think of some issues.

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“There is a presumption that China is trying to reduce contract prices to lower the price of protein. Another possibility is that this year’s downward movement of pork has caused a loss to the Chinese pork farmer.

How is the beef market in China’s presence

Fernando Iglesias, who represents 57% of revenue from beef exports, says the market is eagerly waiting to resume exports to the Asian market this month. According to him, in a hopeless situation, Brazil will not sell to China for another 20 days, and the situation of beef cattle will worsen.

“The farmer will lose more bargaining power. The scenario of keeping animals is complex. China will try to reduce prices further. Therefore, maintaining the ban on Brazilian meat will reduce prices, which will not be small. Will reach $ 280, ”Iglesias predicted.

The Canal Rural Report contacted the Ministry of Agriculture (MABA) and questioned how negotiations with China to resume meat exports were going on, but did not return until this article was published.