Chinese Orders of Brazilian Meat Stall after Coronavirus Outbreak
RIO DE JANEIRO, BRAZIL – Chinese importers had been renegotiating beef contracts with South American exporters. But those talks came to a halt on January 25th and have not resumed, according to reliable anonymous sources, as talks are private. Shipments of Brazilian beef purchased previously have not been affected, they said.
The same applies to chicken and pork, according to Ricardo Santin, head of industry group ABPA. New orders and negotiations have slowed significantly during the extended Chinese New Year holiday, while shipments are running normally, although some delays are expected due to measures aimed at limiting the spread of the disease, he said.
Brazil is home to some of the world’s largest meat companies such as JBS SA and Minerva SA, whose shares dropped more than three percent on Friday as they head toward a third straight week of losses.
Brazilian meat processors expect to get greater clarity on how much coronavirus is impacting demand in the week starting February 17th, when all provinces should be back from the extended holiday break. The longer-term view remains positive, given that China still has to fill the protein gap left by African swine fever.
“Delays are normal considering the gravity of the situation,” Santin said. “Sales to China may lag amid coronavirus effects in the short term, but they should buy even more afterwards.”
Source: Bloomberg
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