China Launches Probe into Brazilian Beef Imports, Sparking Concerns Among Global Producers
Shares of JBS SA, the world’s largest meat producer, and other major Brazilian beef exporters plunged following the news that China is investigating the surge in its beef imports. As the world’s largest buyer of beef, China’s decision to probe whether the increase in foreign shipments has impacted its domestic industry has raised concerns among global exporters, particularly Brazil, Argentina, and Australia.
The Chinese Ministry of Commerce announced the investigation, which was launched at the request of local industry associations. The probe will determine if the influx of beef imports has harmed China’s domestic market. The investigation, expected to take up to eight months, could extend longer depending on the circumstances.
This potential protectionist move has already sent shockwaves through global markets, with Brazilian meat giants like JBS, Minerva SA, and Marfrig Global Foods SA facing significant losses. On Friday, JBS saw a sharp decline of 3.3%, while Minerva dropped 3.1%, and Marfrig lost as much as 7.8% in value.
Between 2019 and mid-2024, beef imports to China surged, hurting the country’s domestic producers who are now facing substantial losses due to oversupply and sluggish consumption. Local beef prices have fallen to multi-year lows, exacerbating the financial strain on China’s cattle industry.
Brazil is the largest supplier of beef to China, accounting for nearly half of the country’s total imports. For Brazil, China is similarly a crucial market, often purchasing almost half of the nation’s beef exports.
Despite the concerns, Roberto Perosa, president of the Brazilian Association of Beef Exporters, remains optimistic, stating that Brazilian producers can remain competitive even if tariffs rise. Perosa also noted that Brazil is actively pursuing new markets for its beef, with ongoing negotiations with Japan, South Korea, Vietnam, and Turkey to diversify its export base.
Brazil’s Agriculture, Trade, and Foreign Relations Ministries are preparing to demonstrate that their beef exports do not harm China’s industry, but instead complement local production. They hope to resolve the situation without significant tariffs being imposed.
The investigation could also negatively affect North American beef exports. While US beef exports to China rose 16% in October, overall exports to China were down 8% in 2024, with industry groups closely monitoring the situation. Argentina, with its smaller export volume, is less likely to face tariffs compared to Brazil or the US.
China’s recent moves, including imposing anti-dumping duties on Australian barley in 2020 amid rising diplomatic tensions, indicate the potential for hefty tariffs. As China’s relationship with Brazil evolves, both nations face a delicate balancing act over trade practices.
Despite Brazil’s closer ties with China, the country has also responded to the influx of cheap Chinese goods, imposing tariffs on various products, including fiber optics and steel, in October. This complex trade dynamic highlights the evolving nature of global agricultural markets.
