January 31, 2020

 

China's coronavirus could boost Brazil meat demand, CEOs say

 

 

Brazilian meatpackers JBS SA and BRF SA told Reuters on Wednesday that the coronavirus outbreak could help boost Chinese demand for their products, as it raises concerns about domestic food safety in China.

 

However, one executive told Reuters that sales could be offset by aggressive demands for discounts from Chinese buyers. In mid-December 2019, Chinese importers began to ask for aggressive discounts as Brazilian beef prices soared, an executive at one of Brazil's largest beef exporters told Reuters.

 

BRF CEO Lorival Luz said on the sidelines of a conference in Sao Paulo that the epidemic could boost sales of foreign frozen and processed meat products in China "for food security reasons."

 

"Remember the virus supposedly started at a market in China where live animals were sold," Luz said. "All BRF frozen and processed meat products go through food security checks in Brazil before being exported globally."

 

The virus is believed to have originated in December 2019 in a food market in the Chinese city of Wuhan that was selling illegal wildlife.

 

Meanwhile, JBS CEO Gilberto Tomazoni said that during China's SARS outbreak in the 2000s, China imported more meat.

 

China's imports of Brazilian meat have already surged in the past year due to African swine fever (ASF).

 

Tomazoni added he expects the impact of ASF on the global meat market to peak in 2020.

 

When asked about Chinese importers seeking to negotiate lower meat prices, Tomazoni said he had heard talk but did not confirm whether JBS was holding such negotiations. He said JBS plans to build long-term relationships in China to stabilise prices.

 

"In long-term commercial relationships, there are gains and losses to be had," Tomazoni said.