by | Jun 14, 2017 | Indicators, Markets

Brazilian beef exports have paid a price for Operation Weak Flesh, the Brazilian government investigation into alleged bribery of food-sanitation inspectors. [See Brazilian Meat Exports Skewered.]

The investigation culminated in March with charges against 21 meat packers, and prompted some 20 countries to ban meat imports from Brazil.

As the Brazilian Beef Exporters Association (ABIEC – Associação Brasileira das Indústrias Exportadoras de Carne) pointed out at the time, these were isolated incidents that did not represent Brazil’s enormous beef production chain. None of ABIEC’s 29 member companies were involved.

Still, Brazilian beef exports were expected to take a hit when news of the investigation broke. Our latest trade data provides a measure of the damage: the value of Brazilian meat exports dropped 18.9% from March to April. This April, exports were down 9% compared with April of last year.

Brazilian beef exports saw sharper cuts. Exports were down 27.3% in April, more than canceling March’s robust gain, and 13.7% off April 2016, as the chart below shows.
Brazilian Beef Exports: % change in value March 2016-April 2017

With few exceptions, the top country markets for Brazilian beef joined in the cutbacks. As the pie chart illustrates, Hong Kong and China split nearly a third of Brazil’s 2016 beef export sales between them. In March, both placed temporary import bans on Brazilian meats.

Egypt, Iran and Chile also issued bans of varying duration.

With only one of the 21 companies involved in the investigation currently supplying meat to Russia, that country settled for enhanced laboratory controls on meat imported from Brazil, reported Global Meat News.Brazilian beef exports: country markets % share by value 2016

April slump in top markets for Brazilian beef exports

Four of the top five markets for Brazilian beef trimmed imports in April, as the chart below illustrates. Only Egypt shows a gain (of 60.6%) – although April 2017 exports to Egypt are nearly 80% off March 2016.

Even without an outright ban, Brazilian beef exports to Russia plummeted 39.5%. Shipments to Iran fell 52.5%.

Brazilian Beef Exports to Top Markets March 2016-April 2017

Brazilian beef exports to top market Hong Kong fell 7.6%, while the value of shipments to China plummeted 36.4%.  Note, as Reuters does here, that a sizable share of beef shipments delivered to Hong Kong are ultimately destined for China.

Industry group Abrafrigo (Associação Brasileira de Frigoríficos) expressed confidence that exports would return to normal as soon as May.

But fall-out from Operation Weak Flesh may not be the only market disrupter for Brazilian beef exporters. Other government inquiries are roiling the Brazilian industry.

In addition, a top competitor, sidelined since a mad-cow scare in 2003, is likely to return soon to the Chinese market: talks between the U.S. and China to restart U.S. beef exports to China are reportedly moving fast, with details likely to be finalized as soon as this month.

We’ll keep tracking and sharing the data here. If you would like to see more detailed data on beef – or any other products – shipping into or out of Brazil, just ask us.


From our blog:

From our free report library:

  • Quick Look @ Mercosur Trade 2016 Based on Latin American data, this report includes top trade partners, share of trade (comparing Mercosur, Pacific Alliance, China, EU, US and all others), top imports and exports by value for each trade bloc member (Argentina, Brazil, Paraguay, Uruguay and Venezuela). Click here to download the report.

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