Brazil, the world’s biggest beef exporter, halted exports of the red meat to China after confirming a case of the animal illness known as mad cow disease.
(Bloomberg) — Brazil, the world’s biggest beef exporter, halted exports of the red meat to China after confirming a case of the animal illness known as mad cow disease.
The case of bovine spongiform encephalopathy was confirmed by Brazil’s Agriculture Ministry on Wednesday, and shipments to China were suspended as part of a trade protocol between the two nations. Brazilian authorities will be holding conversations with Chinese counterparts in a bid for a “prompt re-establishment” of trade flows, the ministry said in a statement.
China, the main destination for Brazilian beef, accounts for about 60% of the nation’s exports. Brazil was also the top beef supplier to China last year, ahead of Argentina and Uruguay, which may boost shipments to the Asian nation while Brazil is sidelined. The same may happen to Australia if talks to ease Beijing’s restrictions on Australian beef are accelerated.
The export suspension may hit some of the world’s major meatpackers, including JBS SA, Marfrig Global Foods and Minerva SA. After plunging ahead of the mad cow case confirmation on Wednesday, meatpackers shares rose Thursday in Sao Paulo. Minerva and Marfrig said they will continue to meet Chinese demand through plants in Uruguay and Argentina. JBS could do the same using facilities in Australia, according to Leonardo Alencar, an analyst at XP Investimentos.
Samples of the infected animal were sent to a lab in Alberta, Canada, to determine if the case is “atypical.” The atypical variety differs from “classical” BSE linked to Creutzfeldt-Jakob disease in people. An atypical case also generally means the animal contracted the disease spontaneously rather than through eating contaminated meat-and-bone meal. Brazil has never reported a classical mad cow case.
The ban on shipments to China is only expected to last a short time if the case is atypical, said Pan Chenjun, a senior analyst at Rabobank. Still, there’ll be a significant impact in the meantime because Brazil is such a large supplier.
- Read More: Mad Cow Case in Brazil May Boost Australian Beef Sales to China
In 2021, the last time an atypical mad cow case was reported in Brazil, China took three months to reopen its market, taking a toll on the nation’s exports. The current ban may be shorter considering global beef supplies are tight and Chinese demand should keep rising, according to Hyberville Neto, director at HN Agro consultancy. Also, diplomatic relations between the nations have improved with the leftist President Lula back on the post.
China Customs, the Ministry of Commerce and the Ministry of Agriculture and Rural Affairs didn’t immediately respond to faxes seeking comment.
The mad cow case was detected in a 9-year old cow in Maraba, Para state. The animal, which was fed on grass only, was culled and its carcass incinerated on the farm.
–With assistance from Vinícius Andrade, Tarso Veloso, Keira Wright and Martin Ritchie.
(Updates fourth paragraph to add Marfrig statement)
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