Mar 27, 2017

China Set to Lift Most Restrictions on Brazilian Meat Imports

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

News reports over the weekend indicated that China was set to lift most restrictions on Brazilian meat as soon as today, Monday, March 27. A few restrictions will remain in place including restrictions on beef processed at JBS facility in Lapa, Parana. The other remaining restrictions will be for meat that had been certified by inspectors now under investigation by the Brazilian Federal Police.

The Brazilian government led an intense lobbying effort to convince China that Brazilian meat is safe because China is Brazil's most important customer for meat products importing approximately US$ 2 billion of meat products in 2016. Brazil has 65 facilities authorized to export meat to China and today, 57 of those facilities are still authorized. With China reopening their market, Brazilian officials are hoping that Hong Kong will soon follow suit.

Since the restrictions were put in place on March 17, there has been approximately 58,000 tons of meat products destined for China that were put in limbo including poultry, pork, and beef. As of last Friday, there were 25 markets that had placed some form of restrictions on Brazilian meat imports.

These restrictions were put in place after the revelation by the Brazilian Federal Police on March 17 that they had conducted a two-year investigation into federal meat inspectors that had allegedly accepted bribes from processors in exchange for certifying tainted meat products. While the investigation is still ongoing, 21 processing facilities and 35 inspectors have been implicated in the scheme known as Carne Fraca (Weak Meat).

In what may be a related development, China announced last Friday that they had removed the last restriction for Australian beef to enter the country. China will now accept beef from 11 Australian beef processors. This move came only one week after China suspended the importation of Brazilian beef.

China is already Australia's largest trading partner and the two countries are expanding their trading relationship at a time when relations with the United States are more strained. China and Australia are joining together on projects involving mining, steel production, and port development.