São Paulo – Brazilian beef exports are set to fall short of record-high 2014 levels this year, but are likely to rebound in 2016 with the resumption of sales to Arab countries, to Japan and increased sales to the United States and China.
Numbers released this Thursday (10) in São Paulo by the Brazilian Meat Exporting Industries Association (Abiec), exports fetched USD 7.2 billion in 2014 and should drop 17% to USD 6 billion this year. Volume-wise, sales should be down to 1.4 million tons, from 1.5 million tons last year. Abiec ascribes the slowdown to market issues in Russia, Hong Kong and Mexico. In 2016, revenues are seen to reach USD 7.5 billion, with 1.76 million tons shipped abroad.
While presenting the industry’s results at an event, Abiec president Antonio Jorge Camardelli said exports will probably go up in 2016 because this year, markets have resumed buying from Brazil, and the amount of product sold to the US and China is expected to increase.
The countries that will resume buying Brazilian beef include Saudi Arabia, Kuwait, Qatar, Bahrain and Iraq. Saudi Arabia announced the lifting of its ban in November. The ban was put in place in December 2012, following Brazil’s announcement that an animal carrying Bovine Spongiform Encephalopathy (BSE), aka mad cow disease, had died in 2010 without developing the condition.
Several countries stopped buying and then started again. Saudi Arabia only lifted its embargo last month and Japan followed suit early this month. Countries which mirror Saudi’s sanitary moves, like Kuwait, Qatar and Bahrain, are expected to end their bans as well.
Camardelli said the first batches of Brazilian beef should be shipped before this month is over, and expects other countries to start buying again in early 2016. Iraq, Camardelli said, is still plagued by regional conflict, but could potentially increase its imports. “The [end of the Saudi ban] is great news, because the country is a leader in its bloc (the Gulf) and it leads the way [for other countries to follow]. We are working with the embassies so they go back to importing from us,” he asserted.
Abiec sees Saudi importing 50,000 tons a year, with combined Saudi, Qatari, Bahraini and Kuwaiti purchases reaching USD 230 million a year. Iraq is expected to buy an additional USD 24 million.
Out of the top 20 Brazilian beef importers, seven are Arab countries. Up until November, Egypt was the third leading buyer, after Hong Kong and China. Egypt bought USD 616.9 million worth of beef from Brazil through November this year, up 17.3% from the comparable period in 2014. It imported 181,800 tons, up 27.1%.
Algeria ranked 10th, followed by the United Arab Emirates at 11th. Lebanon ranked 13th, Jordan ranked 16th, Palestine ranked 18th and Libya ranked 20th. The list was topped by Hong Kong.
Abiec will carry out a promotional action in Egypt next year, after Ramadan, the holy month of Muslims, which will take place in July. “Egypt used to be a minor market to us, but we held a few actions and sales went up. The action we are having there is also a way to say thanks and to celebrate our partnership with Egypt,” he said.
Abiec CEO Fernando Sampaio told ANBA sales to Egypt grew this year because Brazilian product grew more attractive as a result of the favorable exchange rate, and therefore it took away market share from the cheaper buffalo meat Egypt buys from India. “As the product grows more competitive, consumers will opt for the higher quality product,” he said.
Brazil and the United States are at the final stages of talks for the exporting of raw beef from the former to the latter. Sales are expected to begin in the first half of 2016. If so, plants in 14 Brazilian states could sell to the US. Besides, exports to China will probably increase in 2016, since more plants have been accredited to export over the last few months.
*Translated by Gabriel Pomerancblum
