A dispute between the largest beef exporting nation, Brazil and its largest buyer, China is heating up as the superpowers combat it out after the invention of two mad cow instances.
- More countries have joined China in banning Brazilian beef over two instances of mad cow illness
- Brazil is the world’s largest beef exporter by quantity, whereas Australian beef exports value round $10b are probably the most priceless, MLA, ABARES
- China, Egypt, Indonesia, Russia, Iran and Saudi Arabia take 55 per cent of Brazil’s beef exports
Trade was anticipated to renew between the 2 countries this week after an investigation into two instances of ‘atypical BSE’ in Brazil was finalised.
However meat trade analyst, Simon Quilty stated that was now unlikely as different countries signal as much as ban Brazilian beef.
Mr Quilty stated Brazil was claiming that any beef licensed till September 3 was acceptable and was shipped earlier than September 9, however China was saying they may not settle for shipments after September 3.
“They are disputing over the dates of the agreed suspension and this is all about pipeline product … product that they do not want on ships in the system,” Mr Quilty stated.
“The volume of exports out of Brazil to China has been incredible.
Brazil beef ban widens
Mr Quilty says in the last few days, five other countries have imposed bans on Brazil beef exports, despite a finding by the World Organisation for Animal Health, (OIE) that no further investigation was needed.
China, Indonesia, Russia and Saudi Arabia have officially banned Brazilian beef exports and there are unofficial reports that Egypt and Iran have imposed similar bans.
Russia’s ban applies only to the two Brazilian states where the mad cow cases were identified — Mato Grasso and Minas Gerais.
Egypt stopped accepting beef from Sept 4 – 14 and Saudi Arabia announced its ban on Monday and has only focussed on five processing plants in the state of Minas Gerais.
But Mr Quilty stated it was not clear whether or not Hong Kong was a part of the ban.
“I believe what’s fascinating is that if the dispute continues and goes properly past September 19, then I believe the variety of countries that can ban will enhance — in order that seven per cent may balloon out to a a lot larger quantity,” Mr Quilty stated.
Global beef tight
As global meat prices continue to move higher, Mr Quilty said it was in the interest of the six countries, including China, to resolve the dispute quickly.
“Their dependence on Brazil goes to extend from right here, given the tightness of worldwide beef.”
Mr Quilty said he expects beef prices to peak in October and November but said any corrections or falls would be much softer due to the rise in global beef prices.
“I believe it truly is the connection between China and Brazil that is a very powerful issue given Brazil’s dependency on China,”
“And how they resolve that dispute when it comes to the merchandise and the date is the all essential issue.”
#Note-Author Name – Warwick Long