China’s beef supply options are shrinking after the latest move by Brazil to halt exports there following the discovery of two cases of mad cow disease.
The temporary suspension by Brazil comes as China’s two mainstay suppliers, Argentina and Australia, have seen reduced access into the world’s biggest imported beef market this year. Argentina is limiting beef exports until October 31 to contain inflation, while Australian beef is subject to trade restrictions imposed by China amid frosty relations between the two countries.
This suggests the temporary ban on Brazilian beef exports is unlikely to be dragged out. The fact that the two cases of mad cow disease were “atypical” in nature also means the suspension will probably be a “short-term issue,” said Rabobank analyst Chenjun Pan. An atypical case is rare and happens spontaneously, as opposed to classical cases caused by contaminated feed.
The latest measure went into effect Saturday and was declared in compliance with health protocols between Brazil and China. Beijing is set to decide when it will begin importing again.
The matter is expected to be resolved shortly with the World Organisation for Animal Health likely to maintain Brazil’s sanitary status, Marfrig Global Foods SA said Monday. Another Brazilian packer, Minerva SA, said it will keep exporting to China through its Athena Foods subsidiary, which has plants in Uruguay and Argentina.
In June 2019, Brazil halted beef exports to China after an atypical case of mad cow disease, and the ban was lifted by China about 10 days later.
by Jasmine Ng, Bloomberg