Shares in Brazilian beef companies plummet after a US report showed China is drastically restricting red meat imports.
The Asian nation, which normally relies on Brazil for a significant portion of its beef, will buy 19 percent less from global markets next year as its economy struggles under strict Covid-19 prevention measures, the US Department of Agriculture said in a Thursday report.
JBS SA, the world’s largest meat producer, fell as much as 6 percent in Sao Paulo on Thursday, the strongest intraday in about a year. Marfrig Global Foods SA and Minerva SA fell more than 6 percent.
The report comes as beef markets have been in turmoil since the Covid-19 pandemic disrupted supply chains and pushed up prices for consumers around the world. Prices for Chinese beef imports rose about 37 percent in the first half of 2022, the USDA said.
While all Brazilian meatpackers are hit hard by a slump in Chinese consumption, Minerva is the hardest hit. China accounts for about 35 percent of Minerva’s sales, and the company’s overall exports are expected to fall 4 percent in 2023, according to Bradesco BBI analyst Leandro Fontanesi.
By July this year, Brazil accounted for 38 percent of China’s beef imports. China bought about 60 percent of all Brazilian beef exports during the same period.
https://www.independent.ie/business/farming/beef/china-seen-buying-less-beef-pressuring-brazil-meatpackers-41976644.html China bought less beef and put pressure on Brazilian meat packers