Brazil, EU continue antimicrobial talks as exporters prepare for trade restrictions

Brazil's Ministry of Agriculture and Livestock (MAPA) said that technical negotiations with the EU over sanitary requirements related to antimicrobial use in animal production remain ongoing, although European authorities have not yet provided a final response to documentation submitted by Brazil.

The uncertainty surrounding the requirements has already prompted exporters and other participants in Brazil's animal protein sector to prepare for potential export restrictions to the EU.

MAPA said on July 23 that Brazil has not requested any relaxation of EU sanitary rules and remains committed to fully complying with importing market requirements. According to the ministry, technical documentation detailing the country's inspection, traceability, monitoring, and certification systems has been submitted to the European Commission for supply chains including beef, poultry, eggs, honey, and fish products.

While negotiations continue, market participants are already assessing the potential impact on export prices and considering alternative destinations for shipments currently intended for the bloc.

A Brazilian exporter said restrictions on exports to the bloc would directly affect shipments of both fresh and salted boneless chicken breast.

"Starting Aug. 15, we will stop producing salted chicken breast," the exporter said, adding that production is no longer economically viable without EU demand.

Another exporter said uncertainty regarding the restrictions has already pressured boneless chicken breast export prices, with some importers, particularly in Mexico, seeking greater leverage in negotiations.

"Europe has already been affecting prices in general," the exporter said.

According to information previously released by European authorities, the restrictions are expected to take effect on Sept. 3. In practice, a poultry industry participant said products accompanied by sanitary certificates issued by Sept. 2 will still be allowed to be shipped to the bloc.

"Products produced by Aug. 28 will still be eligible for export to the European Union," the source said.

Separately, a participant in Brazil's beef sector said European buyers increased purchases in July and are expected to maintain stronger-than-usual buying activity in August as they build inventories ahead of the restrictions.

The source said the EU has fewer alternatives to replace Brazilian beef supplies than it does for poultry.

"In the case of poultry, the European Union can buy from Poland," the source said. "For beef, it is different."

MAPA said international sanitary relations are based on trust between competent authorities and defended recognition of official inspection and certification systems. The ministry also said that requiring prior proof of the full implementation of measures adopted gradually throughout production cycles is incompatible with the dynamics of agricultural supply chains.

"The beef production chain is long," a market researcher said. "If we stopped using antimicrobials today, exports to the bloc would only resume in two or three years."

The Brazilian government reiterated that access to the EU market depends on the credibility of its national sanitary control systems and said that only products that fully meet destination-market requirements are certified for export.

Brazil remains engaged in technical discussions with the EU and remains committed to meeting the bloc's sanitary requirements, MAPA said.

Platts, part of S&P Global Energy, last assessed the Brazil boneless chicken leg price at $1,923/metric ton FCA Paranagua July 23, down $50/mt from July 22.

The Platts Brazil Beef Marker was assessed at $5,320/metric ton FCA Santos July 23, up $50/mt from July 22.