January 22, 2020
Beef importers in China looking to renegotiate Brazil beef prices
According to Brazilian newspaper Folha de S.Paulo, importers from China are declining to pay for beef shipments exported from Brazil, negotiating discounts after the shipment has arrived to China, reported Reuters.
China approved additional meat import sources overseas to supplement dwindling supplies of pork caused by the African swine fever outbreak in the country. Many new Brazil beef and other meat processing plants were recipients of the approvals, with more than 50% new deals coming from Brazil.
Increased meat purchases from China has resulted in price hikes globally for meat, with domestic beef prices in Brazil hitting a record high late 2019. China also imports meat from Uruguay and Argentina.
The report from Folha de S.Paulo said Brazilian producers who have arranged deals with China's meat importers are facing financial difficulties as the renegotiation means they cannot pay for the upgraded infrastructure invested to expand export capabilities.
Current cargoes to China are being rerouted to other potential export destinations, including Iran.
Brazilian beef exporters group ABIEC did not have a comment regarding the Folha de S.Paulo report.