China gave a nice Christmas gift to Brazil, but it can only be opened next year. This is the assessment of participants in this protein market.
As for consequences for the consumer, the value of the meat is already priced, and the changes will be small, according to assessments by the Ministry of Agriculture.
After three and a half months of interruption in purchases of Brazilian beef, China announced its return to the Brazilian market. This is good news, although the consequences for the sector will only be felt from mid-February and March, when China is more active in the market, says Bruno de Jesus Andrade, operations director at Imac (Instituto Mato-Grossense da Beef).
For Ricado Santin, president of ABPA (Brazilian Association of Animal Protein), the announcement is extremely positive for beef, but it shows a resurgence of Chinese confidence in the Brazilian product, which is good for all proteins. It’s a good Christmas gift for the entire industry, he says.
The return of China removes a series of uncertainties about the Brazilian market and eliminates speculation about how much beef would be left in the country and what would be the effects of this on the entire protein chain, especially on poultry and pork, says Santin.
In the assessment of the Imac director, however, the Chinese should not return to purchases with the same appetite as in the months preceding the interruption, which took place in September.
In that month, Brazil exported 187,000 tonnes of fresh, frozen or refrigerated beef. China was left with 112,000 tons. A record volume.
In the evaluation of Andrade and Santin, this smaller appetite should occur because they are rebuilding the swine herd, in addition to having expanded the range of beef suppliers.
Price reflexes may be unavoidable in this period at the end of the year, when demand grows, there is payment of the 13th salary and new financial aid from the government begins to arrive. The price of arroba de boi should react and allow an adjustment in the internal prices of proteins.
Orlando Leite Ribeiro, secretary of Commerce and International Relations at the Ministry of Agriculture, does not see large variations in prices on the domestic market, because they are already adjusted.
It’s enough to note that, when there was the interruption, domestic prices did not fall, he says.
For Andrade, there is no perspective that the price of beef can fall, since the supply is low, but there is also no room for large valuations.
Prices are already high, and consumers are switching to other proteins. “What we are looking at going forward is price maintenance,” he says.
The director of the Imac believes that the higher demand at the end of the year could put pressure on prices, but January will be a period of possible depreciation, due to high consumer spending at the beginning of the year.
There is currently a lack of balance between animal supply and demand. This balance will only come from the second half of 2022, in Andrade’s assessment.
China’s return to the Brazilian beef market does not harm poultry and swine, according to Santin. The price of beef returns to normality and allows for more transparency in the protein market. The anticipated slaughter of pigs in China affects the Brazilian market more than cattle, he says.
China’s numbers are always superlative and this market normalization will be positive for all sectors, says the president of ABPA.
This year, the production of beef, pork and poultry totals 65 million tons in China, still insufficient for domestic consumption. Pork production will reach 43.7 million tons, for a consumption of 48.6 million.
In his opinion, China will still be a good market for beef, pork and poultry proteins in 2022.
The departure of the Chinese from the Brazilian market caused an average reduction in Brazilian beef export prices. Before the interruption, the ton was at US$ 5,790. In late November, it dropped to $4,920.
The arroba de boi, which reached R$ 322 in July, dropped to R$ 254 at the end of October and reached R$ 310 this Tuesday (14).
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