A food-safety probe against some of the biggest Brazilian meat companies has prompted countries from China to South Africa to Mexico to place restrictions on shipments from the South American nation. That may leave a major hole in the world chicken trade since Brazil accounts for about 40percent of global exports.
What’s worse, Brazil's meat scandal is coming at a time when avian influenza has surfaced in the US, the second-biggest exporter of broiler chicken-meat. With nations including South Korea placing limits on US imports, the world could be left hungry for chicken.
“It’s hard to say which country could fully replace a giant such as Brazil in the world chicken market with the US affected by bird flu,” Jose Vicente Ferraz, a director at Informa Economics Group-FNP in Brazil, said in São Paulo.
Brazil was expected to increase its share of the global trade this year. Untouched by bird flu, demand for its products surged after outbreaks of the virus in Asia, Europe and the US.
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China was expected to be the leading growth market, the US Department of Agriculture said in October. Instead, the tainted-meat scandal could mean damage to the country's image as a premier meat supplier, Brazil’s Trade Minister Marcos Pereira said.
The so-called Weak Flesh probe launched by Brazilian police last week to investigate alleged bribing of federal inspection agents to approve sales and exports even when the meat was spoiled has embroiled food giants BRF and JBS, the world’s largest meat producer. Both companies have denied the accusations.
The investigation quickly triggered importing nations to set limits on supplies. China, which combined with Hong Kong is the biggest destination for Brazilian chicken, has suspended meat purchases from the country.
Saudi Arabia, the number 2 buyer, ordered new inspections of meat shipments, while the EU and Japan have also set restrictions. Brazil’s meat exports plunged to $74 000 (R935 000) on Tuesday, compared with the daily average of $63 million, according to trade ministry data, a drop of 99.9 percent.
“The government is trying to show importers that this is an isolated episode, which affects a few plants,” Pereira said.
“But, it’s possible that Brazilian meat loses value in world trade. We will work to make it as small as possible.”