Brazilian Beef Exports Grow in 2021 Despite Chinese Ban amid Price Increase

Fresh Whole Beef

Frozen Bone-In Beef

Frozen Boneless Beef

Brazil

China

Published Jan 13, 2022

Brazilian beef exports of all kinds had a 9% increase in value in 2021 compared to the previous year as revenues rose from USD 8.48B to USD 9.2B. The increase in exports occurred despite the ban on beef products to China since Sept-21, and as a result, the volume exported had a 7% fall from 2M MT in 2020 to 1.86M MT in 2021. However, due to the increase in global beef prices in the international market, Brazil’s export revenue was able to continue with an upward trend. Furthermore, Brazil remained the leading beef supplier to China, accounting for 24% of the Chinese beef import market in 2021.

According to data from the Brazilian Secretary of Foreign Trade (SECEX), the volume of all beef products, including natural and processed products, fell by 7% in 2021. The volume shipped by Brazil went from 2M MT to 1.86M MT as a consequence of the Chinese ban self-imposed by Brazil in Sept-21 due to the detected cases of mad cow disease. However, due to the accelerated growth in meat consumption that China has seen in recent years and last year’s supply gap in the Chinese market, Brazilian beef sales weren’t affected in value as the price for beef had a 9% growth YoY.

Supply Gap in the Chinese Market Pushed Prices Up

Brazil’s three-month absence from the Chinese market created a significant gap in the global beef trade last year. In May, earlier that year, Argentina suspended beef exports as a domestic price inflation measure and has recently announced the extension of its export ban until 2024. Brazil accounted for almost 40% of China’s beef imports from the Jan- Oct period by shipping 758.7K MT of total Chinese imports (1.97M MT). However, beef prices have seen a continuous increase since 2020, when production plants in meat-productive countries were forced to shut down due to the COVID-19 outbreak. Thus, Brazil's withdrawal left China with a severe gap in beef supply with its two leading suppliers out of the market and prices reaching record-high levels.

Source: Tridge

According to the FAO Meat Market review, since early 2020 before the COVID-19 pandemic, beef, pork, and chicken prices have been up roughly 26%, and since Jan-21, international meat prices have increased 14.9%, with bovine meat rising at 15.1%. At the beginning of Jul-21, Brazilian bovine cattle prices reached USD 4.80/kg, the highest recorded in years. The average price range for Brazilian beef is between USD 4.02/kg and USD 3.89/kg. The US’s beef price also dramatically increased by 20.1% between Oct-20 and Oct-21.

As for Chinese beef prices, the average China import price of frozen boneless beef in Jun-21 USD 7.83/kg compared to USD 7/kg in Jun-20. Increases in wholesale prices also have been reported. Last year, Julian Chow, Trdge’s Engagement Manager in Hong Kong, said that wholesale prices soared through the end of the year. “Robust demand for beef in autumn and winter lead to increased wholesale prices of frozen beef in China. A distributor reported that it sells fresh regular beef at USD 10.65/kg, and premium beef at USD 33/kg”.

Brazil Remains the Leading Supplier in the Chinese Market

According to the Brazilian Association of Refrigerators (Abrafrigo), China continues to be the largest buyer of Brazilian beef, with 1.86M MT shipped in 2021, a decrease of 7% YoY. Brazil also remained the leading meat supplier for China, accounting for 24% of total Chinese imports in value, followed by the US (11%) and Australia (9.1%). In the first seven months of 2021, China’s meat imports continued to follow an upward trend, up by 3% from the same period in 2020.

Source: Tridge, ITC Trade Map

Abrafrigo also released December figures for total Brazilian beef exports. In the last month of last year, Shipments for frozen beef reached 151.5K MT compared to 168K MT in 2020, down 10%. Earned revenue was USD 726.6M, compared to USD 741.2M in 2020, a 2% decrease. In 2021, The US became the second-largest importer of Brazilian frozen beef by acquiring 60K MT in 2020 to 148K MT in 2021, with a substantial increase of 148.9% YoY.

Chile remained the third-largest buyer of Brazilian beef, going from importing 90.4K MT in 2020 to 110.6K MT in 2021, an increase of 22.4% YoY. In total, for the year, 104 countries increased their beef imports from Brazil, while another 68 reduced their purchases.

Positive Outlook for 2022 with Beef Exports to China Resuming

After three months of suspension, Brazilian beef regained access to the Chinese market. According to the Chinese General Administration of Customs (GACC), the shipment of Brazilian boneless beef products under 30-months-old to China has resumed since the last week of Dec-21. Beef trade recommenced under a new set of protocol and sanitary regulations, including a requirement for slaughter animals to be less than 30 months of age and all products to be boneless.

With the resumed trade, Brazil will be looking at a possible breaking record year in volume in 2020 with Argentina, its main competitor, out of the Chinese market until 2024. Meat prices are forecasted to stabilize again through the year, but China’s growing demand will increase, and prices might remain above 2020 levels. With this in mind, Brazil will likely expand its export volume to China at a more competitive rate than the US and Australia, which will be the two other main supplying countries reaching for a more significant market share.

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