Virus may support Brazil meat exports to China

Brazil's meat exports to China may grow as the coronavirus hampers the Asian country's attempts to restore its pig herd from African Swine Fever (ASF).

More than 50pc of the Chinese pig herd has been slaughtered since mid-2018 because of ASF. The country is the top global consumer of pork and has been obliged to boost meat imports to make up for the shortage in the domestic supply.

China in 2019 became the main destination for Brazil's beef, pork and poultry shipments, accounting for 27pc of Brazilian meat exports that year, according to data from producers' associations ABPA and Abiec.

Brazilian meat exports to China were already expected to remain high in 2020 but volumes may rise further amid the coronavirus outbreak.

Coronavirus will delay the restocking of the Chinese herd as the country's logistics and animal feed supply chain has been disrupted by the outbreak. In a report this week Rabobank said it expects the herd to decline further in the first half of 2020 before showing strong growth in the second half. Pork production is expected to fall by 15-20pc this year from 2019's volumes.

Window of demand

The coronavirus has stoked market concerns over meat consumption in China this year. But market participants and analysts still see a window for consistent pork, poultry, and beef demand. Some measures adopted by Beijing, such as the prohibition of wild animal meat sales, could shift demand to other types of proteins.

Pork consumption in China is forecast to reach an average of 30.5kg per person this year, from 29.3kg in 2019, according to the Organization for Economic Co-operation and Development data. The group estimates flat demand for beef and poultry, at 3.8kg and 12.4kg per person, respectively.

ABPA and Abiec did not immediately respond to a request from Argus about their projections amid the coronavirus outbreak.

So far, the coronavirus has infected more than 90,000 people across the World, with around 3,100 deaths confirmed.

By José Roberto Gomes