Brazil's reputation damaged

Brazil is the biggest exporter of beef and poultry in the world and a significant exporter of pigmeat as well. It has been among the cheapest beef producing countries in recent times and has access to most international markets. Of particular interest was its ability to get ahead of Ireland in securing access to China in June 2015. The US was reopened in the latter part of 2016, following closure for several years because of a foot-and-mouth disease incident.

China in particular has taken off for Brazilian beef exports. Prior to China opening, Russia was the main export destination outside South America for Brazilian beef, taking 321,000t in 2014 followed by Hong Kong on 260,000t and Egypt on 150,000t.

Brazil closely rivalled by India

Moving forward to January this year, China was the main destination, taking 18,000t for the month as well as 14,000t going to Hong Kong. Iran came next with 11,000t and then Russia on 10,000t. Looking at data on a monthly basis can be somewhat misleading, but the sheer scale of exports to China and Hong Kong demonstrates that this has now become its key market.

While Brazil is the current number one beef exporter in the world, it is closely rivalled by India, the US and Australia. However, in poultry it is the dominant global player, producing 12.4m tonnes, with annual exports to the value of $6.1bn. This accounts for 41% of all global poultry exports, the main destinations being Saudi Arabia 688,000t, Japan 389,000t and Hong Kong 355,000t. It also has a significant pigmeat industry, producing 3.2mt annually, with Russia taking 186,000t, Hong Kong 260,000t and Egypt 150,000t.

Could Brazil’s difficulty be Ireland’s opportunity?

The scale of the investigation into rotten meat and closure of three plants suggests that it is a widespread issue. Brazil will hope that by taking decisive action against the industry and government officials that it will have limited the damage caused to its reputation. However, damage has been done – the question is how much. It will be interesting to see how the US and China react having recently opened their markets to Brazil.

Ireland had to undergo a rigorous approval process to gain entry to both these countries lasting several years and to date has only achieved partial access to the US and no access at all to China. Could Brazil’s difficulty be Ireland’s opportunity?

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