While plans to further increase Brazil’s exports of beef to China have apparently stalled, expanded access of US beef and pork exports to the PRC has been announced. It has been estimated that China will need almost 3 million tons of beef this year to compensate for domestic pork shortages due to the culling of pigs infected with African swine fever.
On March 27 Reuters reported an unnamed Brazilian meat exporter as saying China has resumed large quantities of imports of beef from that country, following a slowdown during January and February.
Then on March 31 another story stated: “China has not approved any new Brazilian meat plants for export this year because of the coronavirus pandemic, an official at Brazil’s Agriculture Ministry told Reuters, adding that all approvals were on hold until the crisis eases.”
According to Orlando Leite Ribeiro, international affairs secretary at Brazil’s Agriculture Ministry, “The freeze comes despite the fact that Brazil and China implemented a new system in January intended to speed up approvals.”
He suggested that this is a “case of temporary neglect,” as “China was affected first by Covid-19 and when China started to get back to normal, Brazil was affected by COovid-19.”
He added that new approvals are not likely until the coronavirus outbreak in Brazil eases, which could take months.
Greater Access for US Beef and Pork
Meanwhile, the USDA Food Safety and Inspection Service (FSIS) has updated its Export Library for China to reflect expanded access for US beef and pork. These changes were among the provisions negotiated in the US-China Phase One Economic and Trade Agreement that was signed January 15 and entered into force on February 14.
“The US beef and pork industries have waited a long time to have more meaningful and reliable access to China,” said United States Meat Export Federation (USMEF) President and CEO Dan Halstrom. “With much broader access for US beef, the US industry is well-positioned to expand its presence in the largest and fastest growing beef market in the world. The US pork industry has also faced significant barriers that have kept exports to China below their full potential, and these changes will benefit everyone in the US supply chain.”
While US beef and pork are still subject to retaliatory duties in China, this situation has also improved. In early March, China began allowing importers to apply for exclusions from duties imposed in response to US Section 301 tariffs. When successful, this process can lower the effective tariff rate on US beef from 42% to 12%. For pork, the effective rate for frozen muscle cuts can be lowered from 63% to 33% and the rate for chilled cuts can be lowered from 75% to 45%. For frozen pork offals, the rate can drop from 67% to 37%.
“Although approved on an application-only basis, these duty exclusions are available for a full year,” explained Joel Haggard, USMEF senior vice president for the Asia-Pacific market. “We learned of shipments being cleared at reduced duty rates just one day after applications could be submitted. So that is very positive news and another tailwind for the US industry.”
Haggard said the USMEF-China staff has been preparing for expanded access to the market since the Phase One agreement was unveiled earlier this year. Interest from prospective customers has heightened – especially for US beef, which previously had very limited access to China.
“Our team is very engaged with importers and distributors, explaining the new import conditions and assisting them with technical issues such as labeling and product translations,” Haggard said. “As the Covid-19 situation continues to improve in China, we also look forward to scaling up our promotional efforts, showcasing the positive attributes of US beef in restaurants, supermarkets and in the increasingly important e-commerce channels. New e-commerce promotions for US beef and pork are set to begin in mid-April.”