A China will begin an investigation into beef imports, the Ministry of Commerce said on Friday (27), as the world’s largest meat importer and consumer is facing an oversupplied market that has driven domestic prices to record lows. of several years.
Any trade measure to try to reduce beef imports would hit China’s biggest suppliers, such as Brazil, Argentina e Australia.
But this, if it happens, is not something that can be expected in the short term, in the assessment of Brazilian Association of Meat Exporting Industries (Abiec)which represents companies such as JBS, Marfrig e Minervawhich operate in Brazil and other countries, including USA.
A , the ministry said in a statement, adding that this was done following a request from the China Animal Husbandry Association and other livestock industry groups.
For the president of Abiec, Roberto Perosa, nothing changes at the moment for exports from Brazil, the largest global exporter of beef and China’s main supplier, offering around half of what the Asian country imports.
“It’s a long-term deal, so that a year from now there will be a decision (on research), because the document talks about eight renewable months (of research). There is no time to carry out a study like this in eight months, with all the information they asked for,” Perosa told Reuters.
“So nothing changes today, it continues the same way”, he highlighted, saying that, because of this, the Chinese movement should not impact the price of meat or beef.
“Beef trade with the Asian country, therefore, continues normally”, added in a note the Brazilian Association of Meat Packers (Abrafrigo), another entity in the sector.
As imports China’s beef totals reached $14.2 billion in 2023, up from $8.2 billion in 2019, according to customs data.
Brazil was responsible for 42% of the total trade value, followed by Argentina, with 15%, and Australia, with 12%.
From January to November 2024, Brazil exported 1.21 million tons of beef to China, an increase of 11% in the annual comparison, according to data released at the beginning of the month by Abrafrigo.
The Asian country accounted for just over 40% of Brazilian exports of the product.
Perosa, from Abiec, explained that the beef market in China is around 12 million tons, while imports from all countries total 2.5 million tons per year, with Brazil offering around 50% of the total imported.
“I think it is an action to meet the demands of domestic producers in China, because China does not have the production capacity for what it consumes today. And, if consumption increases, then it won’t be able to afford it,” he said.
Among the possible consequences of the investigation, he cited the imposition of a quota and a higher tariff for those who exceed the intra-quota volume.
“What could happen is something that happened to Australia, after a year they said there would be a quota, and above that quota the tariff would increase”, stated the president of Abiec.
Today, meat imported into Brazil already pays a tariff of 12%.
“It could be that after a quota of 1 million tons, above that it would become a tariff of 20%”, he hypothetically exemplified.
Perosa sought to reassure the market by saying that the investigation has nothing to do with dumping — which could eventually have a more severe consequence — but rather with safeguards.
“It’s a calm thing, it’s the country’s right to evaluate this, but we want to cooperate,” he said.
Asked if the process could interfere with new qualifications for Brazilian meatpacking plants for export, he said no.
“It doesn’t change anything, it’s one thing different from the other.”
The investigation is not targeted at specific countries or regions, does not distinguish the origin of products and will not affect normal trade while it is ongoing, the Chinese Ministry of Commerce highlighted.
“It is too early to assume any relevant impact for the country,” Itaú BBA said in a report, citing that China’s bargaining power in the sector appears to be weakening somewhat, as Chinese cattle production declines, and the Brazil has been exporting more and more to the United States.
Cooperation
In a statement, the Brazilian government stated that it will seek, together with the export sector, “to demonstrate that Brazilian beef exported to China does not cause any type of damage to the Chinese industry, being, on the contrary, an important factor in complementing local Chinese production ”.
The Brazilian government highlighted that “there is, in principle, no preliminary measure to be adopted, with the 12% “ad valorem” tariff that China applies to beef imports remaining in force.
Brazil’s beef exports are at record levels this year, with total shipments on track to exceed 3 million tons, according to official data cited by Abrafrigo, which showed an increase of more than 30% from January to November.
Revenue generated from Brazilian shipments to all destinations has already exceeded US$12 billion, an increase of more than 23%, while China imported the equivalent of more than 5.4 billion dollars in the year up to November (+3.4%) .
Optimization
Chinese producers who called for the investigation said a sharp increase in import volumes during the period had “seriously harmed” China’s domestic industry, according to the ministry.
As beef imports in 2023 by China were almost 65% higher than in 2019, according to customs data, and imports in the first half of 2024 were more than double those in the first half of 2019.
Meat prices in China, including pork, beef and poultry, have fallen as consumers, struggling with a slowing economy, buy less.
“Most beef cattle farms in China are in a loss-making situation,” the China Animal Husbandry Association said in a state media report.
The price of beef fell to the lowest level in the last five years, and the price of live cattle fell to the lowest level in the last 10 years, the association said.
Average wholesale beef prices fell 22% to 59.82 yuan ($8.20) a kilogram at the end of December, from 77.18 yuan two years ago, according to Agriculture Ministry data.
In June, Beijing sought to contain prices by asking farmers to limit and optimize the size of their cattle herds, but prices continue to decline amid a surge in imports, particularly from Argentina.
The South American producer’s beef imports during the first 11 months of 2024 increased 10% over the same period in 2023 to 533,005 metric tons.
“The industry reflects that excessive beef imports have caused substantial damage to my country’s beef cattle industry,” the China Animal Husbandry Association said in the report.
“The industry strongly urges the country to take control measures over imported beef to protect farmers’ livelihoods and the security of the sector,” he said.
China is also considering trade restrictions on imports of dairy and pork products from China. European Unionalthough in these cases the anti-dumping and anti-subsidy investigation is a response against the bloc’s tariff plan for Chinese-made electric vehicles, according to analysts.
