Lack of Lula in China limited meat sales agreements – 03/29/2023 – Market

The absence of President Luiz Inacio Lula da Silva (PT) on a Brazilian government mission to China this week has affected some meat industry negotiations to expand exports, people familiar with the matter told Reuters this Wednesday (29). The official’s trip to the Asian country raises expectations of progress in the area.

In addition to a greater number of factories enabled and rehabilitated to export to the Chinese, there was the prospect of discussing changes in a health protocol for atypical cases of “mad cow disease”, according to the people, who spoke on condition of anonymity.

Licenses for slaughterhouses in Brazil could still happen, but the chances at this point are lower due to Lula’s cancellation caused by a diagnosis of pneumonia.

According to one of the interlocutors of Reuters, the mission in China can guarantee the new qualifications, but now the sector cannot determine when this will happen. This person expects confirmation of the trip in April.

The Brazilian government is negotiating the rescheduling of Lula’s trip to China from April 11th to 14th.

According to the source, the initial forecast was that these openings of the market and closing of agreements would take place this week, with the presence of the president in the mission.

At least four more refrigerating plants would be ready for qualification, lacking only the endorsement of the Chinese after additional questions have been answered in recent days by the General Administration of Customs of China (GACC, its acronym in English).

Initially, there were eight units ready for approval, but only four from the beef segment got the Chinese qualification announced by the Minister of Agriculture, Carlos Fávaro, who ended this Wednesday the mission to China.

There was also the resumption of exports to China by two plants that were suspended, one of beef and another of chicken from BRF. However, the company is still seeking the rehabilitation of its two largest units in Brazil, Lucas do Rio Verde (MT) and Rio Verde (GO), according to a report by Reuters.

In a note from the Ministry of Agriculture, Fávaro said this Wednesday that, in all, Brazil has “more than 50 refrigerated plants registered to be evaluated by the Chinese government”.

Regarding the closing of agreements, one of the sources said that Fávaro himself gathered the entourage of executives in China and made it clear that some signatures would only be made with Lula, something that will be postponed until when the trip is confirmed in the president’s agenda.

According to Reuters, the discussion on the health protocol of the automatic embargo in cases of mad cow in Brazil would also be addressed by Lula on the trip.

Currently, beef exports from Brazil are automatically suspended to China when a case of Bovine Spongiform Encephalopathy (BSE), known as “mad cow disease”, is detected, even before its nature is specified by global health authorities.

In atypical cases, like the one found in Pará in February, the disease appears spontaneously and there is no risk to the herd or human health. Classic cases have never been found in Brazil.

The meat sector intended to discuss with the Chinese authorities the change in this protocol between countries to embargo only the export of meat from the state where the disease was detected.

Some executives present in the Brazilian delegation have already returned from the Chinese mission earlier this week and others are expected to return for Thursday, along with Fávaro.

Despite the negotiations affected by Lula’s absence, the Minister of Agriculture celebrated the results achieved, with emphasis on the qualifications obtained for slaughterhouses – something that had not occurred since 2019 -, in addition to the end of the suspension of beef exports that had lasted almost 30 years. days due to the record of atypical “mad cow disease” in Pará, according to a note from the ministry.