Mad cow disease could reduce meat prices in Brazil, but the effect would be short-term, say economists

Published 2023년 2월 27일

Tridge summary

The article highlights the economic implications of Brazil's suspension of beef exports to China following a 'mad cow' disease case in Pará. This suspension, affecting the largest beef buyer, could result in an oversupply in the domestic market, potentially leading to lower meat prices. However, the duration of the embargo and its impact on exports and domestic prices are uncertain. Both the Brazilian government and meat exporting companies are seeking to redirect exports to other countries to avoid significant losses. The economists' perspectives suggest that the price of beef could recover if the embargo is short, and if the case is atypical, it is not expected to cause a widespread panic.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Economists are monitoring the developments of the “mad cow” case in Pará to assess the impacts on inflation and the price of meat. Since the case was confirmed, on Thursday (23), beef exports to China have been voluntarily suspended by Brazil, following health protocol. China is the country's biggest beef buyer. In 2022, it absorbed 53.3% of the volume of shipments and 60.9% of consolidated revenue, according to the Brazilian Association of Frigorificos (Abrafrigo). With no way to sell production to its largest foreign buyer, the Brazilian domestic market could experience an excess supply of beef, which would lead to a drop in product prices, which are no longer under pressure. In the February inflation preview, released yesterday, meat in general (not just beef) has accumulated a 0.70% drop in 12 months, while the full index (IPCA-15) rises 5.63%, and food at home , 11.82%. Among the beef with greater weight in the index, sirloin accumulates deflation of 0.46%, rump back 0.50% ...

Source: Beefpoint