Brazilian Meat Exports Skewered by Operation Weak Flesh

by | Mar 29, 2017 | Markets, Trade Data

Brazilian meat exports have taken a big hit.

On March 17, Brazil’s federal police raided meat packers accused of paying off inspectors to okay rotten and adulterated meat for market, capping a two-year investigation into official corruption dubbed “Operation Weak Flesh.”

Some 20 countries quickly slapped bans on imported meat from Brazil. Within days, the world’s top meat processor reported its meat exports had dropped to $75,000 from a daily average of $63 million. That’s a ruinous drop in Brazil’s No. 3 export, accounting in January for 7% of sales abroad, as the graph below shows.

Brazilian meat exports rank No. 3 among country's exports

Chicken cuts led Brazilian meat product exports in January, followed by frozen beef.

Brazilian meat exports are led by chicken cuts and frozen beef

Brazil has scrambled to restore its trade relationships. On March 27, three customers – China, Egypt and Chile – were reported to have agreed to confine their import bans to products from 21 processing plants subject to investigation. In January, these three customers accounted for about 20% of Brazilian meat exports.

Brazilian meat exports markets are led by China and Hong Kong

Brazil has suspended operations at six of the 21 plants under investigation, according to this Reuters report in News Asia. The other 15 are not permitted to export their products, although they are being sold domestically.

Unfortunately, the scandal has centered on processors in the state of Parana, the leading source for Brazilian meat exports, according to our Latin American data. Even the three countries that have eased their bans will be looking for alternatives: Parana was the source for 18.33% of China’s January imports of Brazilian meats and 16.31% of Chile’s.

 

Brazilian meat exports states of exporters

Our Latin American trade data can reveal more details about the trade upended by the corruption scandal including, in the case of Chile, the companies that import meat products from Brazil. The table ranks the top five by value of trade in January.

Brazilian meat exports top Chilean importers

If you would like to see more data – on meats or any other product in trade – just ask us.

 

Related:

Brazil’s exports slipped 3.1% in 2016. For more data on Brazilian trade within the Mercosur trade bloc and beyond, see:

 

 

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