Brazil stopped exporting beef to China for the time being, followed by the detection of mad cow disease. The circumstances may cause an economic imbalance between both countries. China might re-establish its trade relationship with Australia if the ban is not momentary.
China is the highest purchaser of Brazilian beef globally.
Brazil put an abrupt stop to the export of beef to China on Thursday. The largest beef-selling country’s decision was following the confirmation of an animal ailment called mad cow disease. The nation’s Agriculture Ministry on Wednesday detected the disease, otherwise called bovine spongiform encephalopathy (BSE).
The temporary shipment halt was initiated to comply with the existing agreement between Brazil and China regarding trade. The concerned authorities of the two countries will hold a discussion regarding the matter to attempt a “prompt re-establishment” of trade.
The suspension of transport will adversely affect many dominant meatpackers like JBS SA, Minerva SA, and Marfrig Global Foods. China consumes Nearly 60 percent of Brazil’s beef exports. The samples of the contaminated animal are sent to the World Organization for Animal Health lab in
Canada with a view to identify if it is an atypical or classic mad cow disease.The classical BSE is associated with a brain disorder called Creutzfeldt-Jakob. If it’s atypical, the animals get sick impulsively and not via any tainted food they took. As a response to the situation, agriculture minister of Brazil Carlos Favaro said, “All measures are being taken immediately at each stage of the investigation and the matter is being handled with total transparency to guarantee Brazilian and global consumers the recognized quality of our meat.”
There is less chance for the ban to stay for a long time if the instance is atypical. The impact on the Chinese economy will be huge if it continues for a long time. Also, despite the period, significant changes might occur as Brazil is a huge beef distributor. Meanwhile, more South American countries might see this as an opportunity to expand their business.
The mad cow disease was recognized in a nine-year-old cow in the Maraba municipality of Para state. An identical incident happened in Brazil in 2021 and the ban on beef export to China went on for three months.
Image source: US Meat Export Federation
Mad cow disease
Mad cow disease or BSE, the short form of bovine spongiform encephalopathy, is a neurologic disease found in cows. It is a contagious, degenerative and fatal disease that gets worse over time. A protein called prion causes this brain damaging disease. When the normal prion protein switches to an abnormal one, it gives rise to a detrimental infection. The symptoms may include difficulty in getting up and walking, violent behavior, etc.
Will China reconsider Australia?
If Brazil keeps the ban for a while, the possibility for China to turn towards Australia is very high. In 2022, Australia shifted 150,000 tonnes of beef to China. If they decide to re-evaluate their relationship with Australia by taking off the export bans, it may influence countries like Japan and Korea to use the same products. A ban was put up on exports from Australia in 2022 as a result of a ‘trial by media’ on account of supply issues associated with the COVID-19 pandemic.