Source: Bifu (China) BTC
On June 13, 2019, local time, Brazilian Agriculture Minister Tereza Cristina released news that China has lifted Brazilian beef. Since then, Brazilian beef has officially returned to the Chinese market after a short absence.
Brazilian Minister of Agriculture Tereza Cristina Social Media
Brazilian President Bolsonaro and Brazilian Minister of Agriculture Tereza Cristina (image from the Internet)
Brazil BSE event review
● Local time April 5, 2019: A case of mad cow disease occurred in the city of North New Canaan, Mato Grosso, Brazil. The diseased cattle were 17 years old, the cattle were Nellore, and the susceptible cattle were 23,000 heads;
● Local time May 13, 2019: The suspected case was handed over to the Brazilian Ministry of Agriculture laboratory for testing;
● Local time May 31, 2019: Brazil's Mato Grosso State announced that it found a suspected case. On the same day, the Brazilian Ministry of Agriculture issued a message and confirmed it by the Canadian Food Inspection Agency laboratory, which is an atypical H-type mad cow disease. At the same time, submit an epidemic report to the World Organisation for Animal Health;
● Local time May 31, 2019: The World Organisation for Animal Health has made a risk-free conclusion on the epidemic, announcing that the investigation of mad cow disease in Brazil has ended and will not release relevant reports. The risk of mad cow disease in Brazil is negligible. Any change;
● Local time June 3, 2019: The Brazilian Ministry of Agriculture announced that according to the beef export protocol signed by Brazil and China in 2015, the Brazilian side decided to temporarily suspend the issuance of the Chinese beef hygiene certificate and wait for the Chinese assessment to make a conclusion;
● Local time June 13, 2019: Brazilian beef returns to the Chinese market.
Brazilian beef to China
Affected by the suspension, major factories in China were forced to stop production, and the demand for live cattle fell sharply. The price of live cattle has dropped significantly, with a drop of up to 6.2%. At present, the average price of slaughtered cattle in Sao Paulo, Brazil has fallen to 9.7 reais. kg.
Brazil’s beef exports will decline significantly in June this year, but as the supply of live cattle at 30 months of age is alleviated as time goes by, and the hoarding of live cattle during the export period is concentrated after the export is resumed, The volume of exports to China in July is expected to increase significantly. At the end of May 2018, the Brazilian truck driver’s strike led to a decline in the post-production export trend of the Chinese factory.
Image source: Bifu Big Data
The BSE epidemic in Brazil finally settled. The time was low in the Chinese market, the demand was weak, and the downstream processing plants stopped production. The importers faced a dilemma in the rising price of Brazilian beef futures. An uncharacteristic off-season market horror is a test of players from China who analyze factors, grasp the market, weigh decisions and strategize in a dimension that exceeds the nature of supply and demand. According to market feedback, in the face of Brazilian beef that has been lifted, the majority of industry participants from China are not only expecting beef itself, but also whether Brazil’s first round of quotations after its return to China can be expected.
