Brazil Achieves New Export Record for In-Natura Beef Despite Import Bans in Early 2023

Published 2024년 1월 19일

In 2023, Brazil remained the largest beef exporter in the world, even setting a new record in volume despite a notable plunge in prices. This is even more noteworthy given that the country experienced import bans from several destinations, including China, its biggest market, earlier in the year. Yet, in addition to other factors affecting the world beef markets, this development led to several changes in Brazil’s trade flows.

Countries with the Largest YoY Declines:

China: In 2023, China remained Brazil's largest export destination for beef, buying 1.19 million metric tons (mmt) worth USD 5.7 billion. However, China also led the year-on-year (YoY) declines in both value and volume, with a whopping fall of USD 2.21 billion. After the discovery of an atypical case of mad cow disease, China banned imports of Brazilian in-natura beef, which means beef without derived products, from late February to late March. The decline in export volume couldn’t recover to end the year with the cumulative gain, but it’s worth noting that in the latter months of the year, exports to China were growing at double-digit rates.

Egypt: After China, which can be separated into a whole different category as its share is over half of total exports (59%), Egypt led the YoY decline, as exports to this destination fell by 24 thousand metric tons (mt) to reach a total of 61 thousand mt. Egypt went from the third-largest destination in 2022 to the fifth in 2023. Egypt’s declining exports correspond to lower demand, as soaring prices in H1-2023 led Egyptians to purchase less beef to favor cheaper proteins.

Indonesia: Following Egypt, Indonesia experienced the largest decline, with a fall amounting to 18 thousand mt to touch 2.7 mmt, the lowest volume for this destination since 2018. Exports to Indonesia declined as Australia ramped up its beef production in 2023 from multi-year lows experienced in 2022. This led to increased imports from Australia as prices considering logistics made more sense.

Countries with the Largest YoY Increases:

Chile: Chile led 2023’s YoY gains in Brazilian exports, with 21 thousand mt more than the previous year for a total of 99 thousand mt. However, the gain was huge mostly because 2022’s base was abnormally low at 79 thousand mt, compared with an average of 106 thousand mt from 2018 to 2021. Lower prices and depressed trade against other locations favored Chile.

UAE: Exports to the United Arab Emirates (UAE) rose by 19 thousand mt YoY, the second largest gain, reaching a record of 75 thousand mt. The UAE continued with its growth trend over the past years, in which its purchasing power, increased preference for Brazilian beef, and ongoing growth in commercial relationships between Brazil and Arab countries all played a role.

Russia: Exports to Russia climbed by 12.5 thousand mt to a three-year high of 50.1 thousand mt. It’s worth noting that Russia also enacted a temporary ban in early 2023, and exports managed to climb considerably despite this development. Exports in 2021 were low due to sanitary restrictions, while the Russia-Ukraine conflict in 2022 led to reduced tradeflow. Nonetheless, 2023’s level remained far from historical levels, particularly from 2014’s high of 309 thousand mt.

Special Mention:

Mexico: To combat inflation, Mexico allowed the import of Brazilian in natura beef after negotiations that reportedly lasted over a decade. From Apr-23 until the end of the year, Brazil managed to export 5.07 thousand mt of beef worth USD 23 million. Mexico became the 26th largest destination in terms of volume and the 27th in terms of value. However, in terms of YoY growth in quantity, Mexico experienced the eighth-largest increase in value and the tenth-largest increase in volume. Due to the size of this market and its rapid growth, Mexico is poised to continue gaining market share in Brazilian exports in 2024.

Exports continue following their long-term growth trend.

According to trade data from Brazil's Ministry of Development, Industry, Commerce and Services, Brazil exported a record 2.005 mmt of beef in-natura in 2023. This maintained Brazil as the leading beef exporter in the world. The aforementioned 2 mmt figure represents an increase of 0.7% versus the previous year.

In terms of value, Brazil's exports fell by 20% YoY or USD 2.3 billion to USD 9.4 billion. The total value plunged despite more volume exported as the average export price declined by 20%, as well to a three-year low of USD 4.73 per kilogram (kg). The decline can mostly be attributed to ongoing supply growth and falling input costs across the board.

Considering 2023’s lower price compared to 2022 could suggest that demand growth was actually less than expected in real terms. Nonetheless, comparing prices and volume to previous years, 2022 continues to appear as the anomalous year, when buyers grossly miscalculated demand growth after the pandemic. Therefore, 2023’s demand remained in line with the growing trend in place since at least 2014.

Source: Tridge and Brazil's Ministry of Development, Industry, Trade and Services

Brazil’s beef production and exports are projected to continue growing this year. Lower domestic production in the huge United States (US) market will continue to foster exports from Brazil, while current price levels favor demand growth in the rest of the world. China is expected to continue being the top export destination, but ongoing growth is anticipated from the US and some Middle Eastern countries such as Saudi Arabia and the UAE. Mexico is also projected to experience notable growth.