A dispute between the biggest beef exporting country, Brazil and its biggest customer, China is heating up as the superpowers fight it out after the discovery of two mad cow cases.
- More countries have joined China in banning Brazilian beef over two cases of mad cow disease
- Brazil is the world’s largest beef exporter by volume, while Australian beef exports worth around $10b are the most valuable, MLA, ABARES
- China, Egypt, Indonesia, Russia, Iran and Saudi Arabia take 55 per cent of Brazil’s beef exports
Trade was expected to resume between the two countries this week after an investigation into two cases of atypical BSE in Brazil was finalised.
However meat industry analyst Simon Quilty said that was now unlikely as other countries sign up to ban Brazilian beef.
Mr Quilty said Brazil was claiming that any beef certified until September 3 was acceptable and was shipped before September 9, but China was saying they will not accept 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 said.
“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, Russia and Saudi Arabia have officially banned Brazilian beef exports and there are unofficial reports that Indonesia, Egypt and Iran have imposed similar sanctions.
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 said it was not clear whether Hong Kong was part of the ban.
“I think what’s interesting is if the dispute continues and goes well beyond September 19, then I think the number of countries that will ban will increase — so that seven per cent could balloon out to a much greater number,” Mr Quilty said.
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 is going to increase from here, given the tightness of global 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 think it really is the relationship between China and Brazil that’s the most important factor given Brazil’s dependency on China,”
“And how they resolve that dispute in terms of the products and the date is the all important factor.”
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