Shanghai - Zhang Lian has 270 tons of frozen Brazilian
beef on a ship steaming toward Shanghai that he may not be able to get through
customs when the vessel arrives next month.
Zhang’s Shanghai Yadongsheng Import-Export trades $200
million of meat annually, part of the global supply chain that keeps China fed.
China’s decision to halt imports of Brazil’s meat until authorities are sure
it’s safe has left Zhang with some worried customers.
"It’s a bad situation,” said Zhang, an import manager
at Shanghai Yadongsheng, which is called ADP Shanghai in English. “We’re
telling customers who ordered those containers to be patient. We are advising
new customers to avoid ordering Brazilian beef for the foreseeable
future."
Brazil is the world’s largest beef and chicken exporter,
accounting for almost a fifth of global exports and its investigation into the
possibility that some of that food is tainted has hit importers, shippers, food
processors and customers around the world.
Zhang’s company has 10 containers of the meat on the high
seas in a Hamburg Sud Group container ship that is due to arrive in Shanghai by
the end of April. The meat is destined for supermarkets and restaurants, but if
the situation isn’t resolved in time, it will have to be destroyed.
The crisis arose after Brazilian authorities announced on
March 17 they’re investigating evidence food producers bribed government
officials to approve the sale of spoiled meat. Prosecutors said some sausages
and cold cuts contained animal parts such as pig heads, and that there were
cases where cardboard was added to meat products or acid used to mask the smell
of tainted meat.
Read why Brazil’s tainted-meat probe is worrying the
global food trade
Read also: SA bans import of meat from Brazil
It takes a month or more for meat from Brazil to reach
Asian ports, so cargoes already loaded are now in limbo. China, including Hong
Kong, is the biggest export market for Brazilian meat, buying about a third of
the $5.5 billion of beef shipped from Latin America’s largest economy last
year, according to the meat exporters group Abiec.
Hong Kong said on Tuesday that it has also temporarily
suspended the import of frozen, chilled and poultry meat from Brazil. The city
is a major transshipment point for meat and other goods into China.
Cofco Meat Holdings, a listed unit of China’s state-run
food giant, received news of the ban on Sunday and called its supplier in
Brazil on Monday. Cofco told the supplier not to ship the Chinese company’s
order, said Li, a woman in the company’s beef import division who only gave her
family name. She said they don’t have any containers stranded at sea.
She said they’re not cancelling the order until it is
clear how long the dispute will last. She said the government communicated that
it is currently investigating the situation and that nothing wrong has been
found yet. Cofco Meat sold 107,200 tons of imported frozen meat in 2015.
Zhang said a government order told his company that from
March 19, China customs should stop accepting all Brazilian meat imports for
inspection, and cargoes already accepted for inspection should not be opened.
Importers can choose to leave refrigerated containers plugged in at the port
until further notice.
Supermarket reaction
In Brazil, the nation’s biggest meatpackers are trying to
limit damage from the probes. Food giants JBS SA and BRF SA took out full-page
newspaper ads and paid for prime-time television spots to reassure local
consumers that their meat is safe. Two executives at JBS and three at BRF are
among those being investigated, police said.
Brazil’s President Michel Temer tried to reassure export
customers by hosting an all-you-can-eat steak dinner on Sunday for ambassadors
of major buyers. The Chinese envoy sat next to him at the restaurant.
But food scares are easier to start than stop, especially
in China, which has a history of scandals over tainted food. Sun Art Retail
Group, China’s largest hypermarket operator with 400 outlets, said it has
already removed Brazilian meat products from shelves. In Hong Kong, Watson
Group’s PARKnSHOP chain of supermarkets, one of the largest in the territory
with 300 outlets, said on Wednesday that it has also removed products from
shelves and offering refunds or exchanges to customers.
Brazilian meat may not be so easy for customers to
identify. One importer, whose suppliers include JBS, said Brazilian beef tends
to be about 10 percent to 20 percent cheaper than other imports, so is mostly
sold to factories for food processing. The fresh steaks sold in supermarkets
and restaurants are generally not from Brazil, he said.
Limited time
In a downtown supermarket in Shanghai, the imported fresh
beef offered comes from Australia, New Zealand, Spain and Canada. Those
countries stand to benefit from Chinese demand if the ban on Brazilian meat
isn’t swiftly resolved.
Zhang said ADP Shanghai has a limited amount of time for
the ban to be lifted or it may be left with a spoiled cargo. If the cargo is
blocked by customs, it could be stuck in a special bonded warehouse for cold
storage, with the supplier racking up fees that could end up costing more than
the meat.
Chilled meat needs to get from meatpacker to consumer in
about 70 days and meat shipped from Brazil uses more than half that time
at sea, according to Asian shippers. Inspection times at the receiving
port are usually four or five days, but can take two weeks for a thorough
examination. Agricultural products that do not pass customs inspections are
typically burned at the port, the shippers said.