Lingering effect of meat scandal on Brazilian exports?
Following the Brazilian meat “scandal” pork exports from Brazil fell on the year in March and April, by 3% and 16% respectively. This followed positive movements in export volumes during the first two months of the year.
In mid-March it was discovered that a number of meat processors were implicated in corruption, involving the export of meat unfit for human consumption. This lead to the temporary closure of a number of key markets to Brazilian meat products, most notably China and Hong Kong. Brazilian pork competes with the UK on the important Chinese market, so developments here can impact on our own export prospects.
In March, shipments of Brazilian pork to China and Hong Kong were back 24% and 27% on the year respectively. This reflects the period of around a week when a total ban on imported Brazilian meat was enforced. Following updated information from Brazilian authorities, some countries that had enforced a ban (including China) relinquished the restrictions. Other destinations, including Hong Kong, kept restrictions on plants that were under investigation.
Despite the majority of restrictions being lifted, Brazilian pork exports remained 16% lower year-on-year in April, driven by substantial declines in shipments to Hong Kong (41%) and China (59%). Shipments to both markets were also down on March this year. This may be due to importers switching to alternative suppliers both during and beyond the ban. Despite these difficulties, shipments to Brazil’s primary pork export market, Russia (which did not impose any restrictions) have continued to increase.
Over the next few months, it will be interesting to see whether the scandal will have a lingering impact on the reputation of Brazilian meat on the export market and further depress trade flows.
Bethan Wilkins, Analyst
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