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“We now need to sit down with the Chinese, our main buyers, and try to review this, as it makes no sense for an isolated case to contaminate the chain as a whole”, highlights João Otávio de Assis Figueiredo.
During Carnival festivities, there were rumors of a new case of Bovine Spongiform Encephalopathy (BSE) in Brazil, specifically in the municipality of Marabá (PA). This made Brazilian livestock farmers remember similar events in 2019 and 2021, which suspended exports and impacted protein prices.
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“We had two events in the recent past and we can compare to see what the impact would be on the market. But the shock has already been given, the market really felt it, however, the government has been working quickly”, highlights João Otávio de Assis Figueiredo, research leader at DATAGRO Pecuária. “In 2019, the market opened in fifteen days; in 2021, China took 100 days to resume purchases”, he adds.
In this case, Brazilian authorities notified the Chinese government, suspending exports to the Asian country. This movement on the part of Brazil occurred even before the atypicality was confirmed by the World Organization for Animal Health (WHO) – samples were sent to the institution's reference laboratory in Alberta, Canada. “The government is working quickly and transparently”, points out João.
Government and market believe that the embargo on Brazilian beef exports to China should last less than in 2021. In an interview with CNN Brasil this Thursday (23), the Minister of Agriculture and Livestock, Carlos Fávaro, stated that the embargo should be removed at the end of March. On the same day, Fávaro also received the Chinese ambassador to Brazil, Zhu Qingqiao, at the ministry's headquarters.
“We are working with total transparency and agility in providing information about the BSE case in Brazil and will treat all our commercial partners with maximum respect,” he said in a post on his Twitter account.
Dependence on Brazilian meat
The research leader at DATAGRO Pecuária highlights Chinese dependence on Brazilian beef. “Another important point is that China currently depends more on Brazilian meat than in other periods. Of Brazil’s entire 2022 export, over 60% went to China – around 40% of all Chinese imports.”
João also talks about possible “market opportunism” in crisis contexts like this. “There is often market opportunism in these moments, to renegotiate prices, but Brazil is very competitive today compared to the main players”.
Diplomacy
The current government maintains good relations with China, which can help a lot in negotiations. “Brazil is doing the best it can. We now need to sit down with the Chinese, our main buyers, and try to review this, as it makes no sense for an isolated case to contaminate the chain as a whole”, says João.
Source: datagro
