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JBS, Marfrig face China's widening coronavirus farm goods restrictions

The Chinese government is extending restrictions on imports of farm products due to concerns about infections from COVID-19. In the latest move, the government has applied restrictions to shipments of meat from Brazil, Canada and Germany. That follows earlier restrictions on imports from the U.S. which may have also been linked to the countries' ongoing trade conflict, as outlined in Panjiva's research of June 23.

The latest round of restrictions include shipments of chicken and beef from Brazilian ports owned by Marfrig Global Foods SA, JBS SA and others. In terms of poultry exports, China accounted for 20.3% of Brazilian exports in the 12 months to April 30, Panjiva's data shows. It was also the fastest-growing destination for Brazilian poultry with an 8.0% increase in shipments in the three months to April 30 compared to a 3.5% dip in shipments to Saudi Arabia and unchanged exports to Japan.

The recent export growth was led by a 15.4% rise in exports to China linked to BRF SA in the three months to April 30 having declined by 3.0% in 2019, while those linked to BRF (owner of one of the targeted plants) were broadly unchanged after rising 3.6% higher in 2019.

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Beef exports from Brazil meanwhile have had something of a renaissance with a 19.5% year over year surge in total shipments in April following a 6.1% contraction in the first quarter. That included a jump in shipments to China of 96.8% year over year after an increase of 23.9% in the first quarter. The fastest rate of growth was experienced by Minerva SA, with a 236.5% jump in April, while shipments linked to Marfrig (owner of one of the targeted plants) grew by 133.0% and JBS's improved by 73.4%.

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Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.