Brazil tries to release bovine meat stopped in Chinese ports; Lula talks with Xi – 06/06/2023 – Market

Shipments of Brazilian beef, estimated at up to 70,000 tons, are stuck at Chinese ports awaiting a solution to a stalemate related to a previous embargo stemming from an atypical case of Bovine Spongiform Encephalopathy (BSE), known as “cow” disease. crazy”, in Brazil.

Meanwhile, cargoes of meat produced for months are waiting to enter the Asian country. The situation even led to a call from President Luiz Inácio Lula da Silva to his Chinese counterpart, Xi Jinping, in an attempt to resolve the situation, said the Brazilian leader himself during an event in Bahia, this Tuesday (6).

Brazil suspended beef production for China after a case of BSE was reported on February 23, but production certified for shipment to the Asian country before that date continued to be shipped, under the risk of being banned from entering the territory. Chinese, which ended up happening.

A month later, on March 23, China agreed to the resumption of beef exports from Brazil, which has the Asian country as its main customer, with purchases of more than 60% of the total exported in 2022 by Brazilians.

Shipments were resumed after the end of the embargo, established between the two countries when there is atypical BSE. But that did not resolve the situation of those lots shipped during the ban period, although exports after March 23 do not face any problem.

According to Lula, the Minister of Agriculture, Carlos Fávaro, informed that there are “70,000 tons of meat stopped inside containers in Chinese ports”.

The president also revealed, during an agricultural fair in Bahia, that Fávaro told him this week that the product was sent “out of date”, and that little could be done, after the minister had spoken with his Chinese colleague.

“Wrong or not, we have the Atlantic Ocean full of Brazilian containers of meat. I had to pick up the phone and call President Xi Jinping,” said Lula.

“I don’t want to know if the guy who has the container voted for Lula or not, or if he annulled the vote. I want to know that he is Brazilian and that he is exporting a Brazilian product, and that he has the right to earn the money for the product he produced…”, he added.

The volume cited by the president, which would be in containers awaiting release to enter China, is representative, considering monthly exports from Brazil.

In May, Brazil exported around 170,000 tons of fresh beef to all destinations, accounting for an increase in total exports of around 16,000 tons compared to the same month of 2022.

According to a source in the sector, who spoke on condition of anonymity, the agreement with China provides for the interruption of exports in case of BSE, and this has been complied with. But the pact is not valid for cargo certified before the embargo.

“That’s what happened, on the date of the announcement, February 23, production for China was stopped. From then on, the Ministry of Agriculture no longer certifies anything. What happens is that there is a volume that was produced before 23/ 02, but which was shipped after that day”, he explained.

“The Chinese think that Brazil broke the agreement because it continued to ship… but the agreement is in relation to production, not shipment…”, he explained.

This same impasse was registered in 2021, when two atypical cases of BSE were registered in Brazil, and there was a temporary embargo on exports to China. On that occasion, the Chinese customs authorities ended up accepting the cargo, after actions by the Brazilian government.

The volume stopped at that opportunity was 100 thousand tons.

According to the industry source, who avoided talking about volumes currently stopped at Chinese ports, exporters are awaiting a decision from China.

“The Ministry of Agriculture and the government in general are engaged in a process of technical convincing that there is no reason not to let this meat in,” he commented.

The impasse, added the source, has not affected new shipments. “Everything that was shipped after the reopening has no problem getting in”, he stressed.

According to the director of the consultancy Agrifatto, Lygia Pimentel, the market says that the volume stopped in ports in China is between 40 thousand and 70 thousand tons.

“It is not possible to know exactly what is still waiting there and what has already returned or been relocated,” she said, considering that part of the cargo may have gone to other countries.

She confirmed that those shipments remain stopped, while Chinese claim that they would not accept those batches, that they would have to return or be forwarded to other destinations.