After Brazil suspend their shipments of beef a China for a case of mad cow disease, For the country headed by Xi Jinping this means, albeit temporarily, the stoppage of half of the purchases made abroad. Meanwhile, there could be an increase in Chinese demand for Argentina, its second supplier, and an improvement in the country’s value. Last year the sale of Argentine meat to China was 485,711 tons by product weight for US$2,247.4 million.
“For China, the fact that half of its imports are at risk is bad news because there will be no one who can replace it.. That already happened in the last quarter of 2021 and that’s why prices went up. So they are very worried.” indicated the consultant Víctor Tonelli. in 2022 Brazil represented 50% of the total imports of the Asian giant with 1,240,000 tons of product weight.
Meanwhile, according to Tonelli, for the country led by Lula it is “Tremendous because China represents 55% of its exports and with the closure of the market they have to see where they place the surplus”.
The specialist clarified that the samples from an animal in the state of Pará were sent to the laboratory of the World Organization for Animal Health (OIE) in Alberta, Canada, where a result is awaited. However, the Brazilian government considered the case confirmed because it assumes that, according to its analysis, it is a case of atypical mad cow, without transmission.
The period in which the market for Brazil is closed will depend on whether it is confirmed that it is an atypical mad cow or not. If it is atypical, the time will be shorter. “In any case, the figures are of such magnitude that the impact on the world market is fierce”he commented.
For prevention “the country has made a responsible decision and, therefore, will not suffer a penalty, but will be suspended [las exportaciones] for as long as it takes China to make sure it is not at risk of importing Brazilian meat.” In 2021 the neighboring country passed more than 100 days without being able to export to the Asian giant for two cases of mad cow in the states of Minas Gerais and Mato Grasso.
According to Tonelli, if the export closure is maintained, it is likely that China will seek offers in Argentina and Uruguay, which are its second and third supplier, as well as other sellers with less participation. ”China is going to have a hard time replacing Brazil. If the suspension lasts about a month, maybe it can hold out with the stocks, but if it is longer, this is explosive, ”she specified.
He explained that Uruguay can supply it, but its volumes “are limited” and the United States has a serious self-supply problem due to a roundup sale for the third consecutive year of drought.
In the short term, Argentina can grow because “It will find itself with an oversupply of cows due to the drought and, in addition, it has the industrial capacity to grow. If China pays more and the chain transfers it to the producers, the country can grow.”he commented.
Last December, the value paid in Chinese ports for imported meat had dropped 17% compared to the value peak of last July. This fall was linked to adverse conditions in the Chinese market due to restrictive policies due to Covid-19, the devaluation of the local currency and the climate of uncertainty due to economic stagnation. Brazil, which had increased its shipments to that destination, validated the drop in values.