São Paulo – The performance of Minerva slaughterhouse is not being affected by the embargo by six countries to Brazil’s beef exports. This was stated by the president at the company, Fernando Galletti de Queiroz, on Thursday (20), at a meeting of the Brazilian Association of Capital Market Analysts and Professionals (Apimec), in São Paulo. The Ministry of Agriculture issued early this month a statement that an animal with the agent that causes mad cow disease died in the state of Paraná in 2010. The bovine, however, did not develop the disease and did not die due to it.
Ever since that happened, Japan, South Korea, Taiwan, South Africa, China and Saudi Arabia have totally suspended their beef imports from Brazil. These markets, however, represent just 4.3% of Minerva raw beef sales and 4.7% of the country’s beef exports. Egypt has also stopped importing beef, but just from the state of Paraná, where Minerva does not have operations. In the case of industrialized beef, the impact for Brazil is 1.2% and for the meat packing plant, it is nil. “In exports as a whole, the impact is below 4%,” he said.
According to Galletti, the embargoes do not affect company operations as these sales are being turned to other countries and a little to the domestic market. The president at Minerva spoke about the political component and the game behind the embargos. “Saudi Arabia, while banning the import of beef, made way for standing cattle imports. This is total nonsense. The perspective is as follows: in the case of raw beef, there are some competitors and the impact is not so large, so we will negotiate with Brazil. In the case of standing cattle, there are no other suppliers, so we will continue importing,” said the company president.
The Minerva research manager, Fabiano Tito Rosa, also minimized the effects of the problem for the Brazilian market. “The embargoes are small, in marginal markets. Of the six that are now banning, three do not buy anything: South Korea, Taiwan and Japan. They do not buy beef from Brazil, they buy a little processed meat. Taiwan buys no industrialized or raw beef. They, therefore, ‘embargoed’ what they didn’t buy. South Africa buys very little. China and Saudi Arabia are a bit more important markets, but if we take these six markets into consideration, we refer to just 4% to 5% of Brazilian exports; we have other alternatives, it is nothing,” he said.
Executives at Minerva defended that, in the global scenery, South America is the only alternative for greater supply of beef. “Even if we have, as is the case, a sanitary problem, that does not change the structure of the market. The beef SAD (supply chain) is short. You have greater demand in developing nations, a reduction in production in developed nations and this gap must be supplied, and it can only be supplied with beef from South America,” said Galletti.
According to him, there is no possibility of greater production in Australia, and there is already reduction in Europe and the United States. The United States depend much on grain to feed their cattle and the price of grain is on the rise. “The price level of grain has changed and will no longer return,” said Tito Rosa. And the United States should continue facing the drought next year, while Brazil has a forecast of favourable climates. If they decide to put the cattle out to graze, they will not, according to the executive, have the same possibilities in terms of resources as Brazil has. Therefore, despite the embargoes, Minerva continues with a positive perspective for the market.
*Translated by Mark Ament
