Brazil beef-packers losing up to $25 million a day after halting China sales over mad-cow concerns

Ana Mano
·2 min read
Employees work at the assembly line of jerked beef at a plant of JBS S.A, the world's largest beef producer, in Santana de Parnaiba

By Ana Mano

SAO PAULO (Reuters) - Brazilian beef-packers are losing between $20 million and $25 million per working day after a self-imposed trade ban halted sales to China, agribusiness consultancy Datagro Pecuaria said.

The estimate is based on current beef export prices ranging between $4,800 and $5,000 per tonne, data sent to Reuters on Wednesday showed.

Brazil voluntarily suspended beef sales to China on Feb. 23 after reporting a case of Bovine Spongiform Encephalopathy (BSE), known as mad-cow disease, in compliance with sanitary protocols.

A subsequent investigation found the case to be "atypical," meaning Brazil has maintained its insignificant risk status for BSE and could resume exports to China.

The lifting of the ban, however, hinges on Beijing's formal approval.

Brazilian authorities said all relevant information regarding the mad-cow case has been shared with China.

The government now plans to persuade Beijing to lift the ban before or during a state visit by Brazilian President Luiz Inacio Lula da Silva to China at the end of March.

Brazilian Agriculture Minister Carlos Favaro will travel to China before President Lula on March 20, a source told Reuters. The ministry did not comment on his travel plans.

Two similar beef trade bans involving China lasted 13 days in 2019 and 103 days in 2021, according to Datagro, forcing Brazilian beef-packers to supply Chinese clients from their other South American factories.

Last year, Brazil exported a total of 1.991 million tonnes of fresh beef, with about 62% going to China.

Brazil is China's biggest beef provider, ahead of competitors Argentina and Uruguay, accounting for 40.5% of its beef imports, according to Datagro Pecuaria.

China also imports beef from New Zealand, the United States and Australia.

On a working daily basis, Brazil sent an estimated 4,700 tonnes of beef to China in 2022, Datagro data showed.

(Reporting by Ana Mano in São Paulo; Additional reporting by Lisandra Paraguassu in Brasília, Editing by Angus MacSwan)