China, the EU, Japan, Chile, Mexico and Hong Kong have imposed various degrees of import bans on Brazilian meat after a corruption scheme allowing the sale of products past their due date was uncovered late last week.
Meat is Brazil’s fourth-largest export by value (at almost US$14bn), and the bans could hurt the country’s slow economic recovery. President Michel Temer has tried to reassure commercial partners about the small scale of ‘Operation Weak Flesh’: only 21 out of over 4,800 meat processing firms are being investigated for allegedly paying off inspectors to overlook the processing of rotten meat and the export of products containing traces of salmonella.
But because they include industry giants BRF and JBS (the world’s largest meat processor), buyers have been quick to react.
China, the largest importer of beef and chicken from Brazil (accounting for one-third of purchases last year), and Chile suspended all shipments. The EU suspended imports from four Brazilian facilities.
Mexico issued a ban on poultry imports late Tuesday (March 21), asking Brazil to provide guarantees on the quality and safety of the produce. Japan, Brazil’s third-largest market for chicken, said it would not allow imports of products coming from the 21 businesses under investigation. Argentina announced that it would increase quality controls and Russia asked for clarifications from Brazil.
Hong Kong, the biggest market for Brazilian beef, having imported US$718mn worth of it in 2016, was the latest to temporarily suspend the import of frozen and chilled meat and poultry on March 21.
South Korea has lifted a temporary ban on the distribution of chicken already imported from Brazil, after quality testing confirmed that no tainted poultry had entered the country.
Capital Economics warned on Monday (March 20) that “the developing scandal over Brazil’s meat exports could plausibly derail the country’s economic recovery”.