JBS Stays Positive about China Amidst Short-Term Challenges

18 Aug, 2023

JBS Stays Positive about China Amidst Short-Term Challenges

JBS SA, the world's largest meatpacker, maintains a positive outlook on China, despite recent indications of reduced beef demand from Brazil, one of the key global suppliers.

During an industry event, JBS CEO Gilberto Tomazoni expressed confidence that Chinese beef consumption will eventually rise, as the aspiration for this protein source is deeply ingrained in Chinese society. Notably, he highlighted that China's per capita beef consumption has grown from around 5 kg (11 pounds) five years ago to approximately 7 to 7.5 kg (15 to 17 pounds) currently.

Tomazoni emphasized that even when pork prices experienced fluctuations in China, there was no significant deviation in the trajectory of beef consumption. He firmly believes that over the long term, beef consumption in China will exhibit an upward trend.

Despite this positive outlook, Brazilian beef exports to China faced challenges in the first half of the year, experiencing a decline of 29 percent to $2.6 billion. In terms of volume, the drop was 5 percent, amounting to 512,306 metric tons, as indicated by trade data.

Eduardo Miron, the CEO of the family-owned Brazilian beef packer Frigol, echoed concerns at the same event, highlighting the notable decline. He also expressed apprehension about the current low domestic consumption levels and the overreliance on a solitary importer, referring to China.

A U.S. Department of Agriculture (USDA) report from March revealed that Chinese demand in 2022 constituted a significant portion, accounting for 64 percent of total Brazilian beef exports. The United States emerged as the closest beef export destination for Brazil, contributing 7.6 percent to the trade volume.

In conclusion, JBS SA remains optimistic about China's potential for increased beef consumption, envisioning a future rise despite recent fluctuations. While challenges have affected Brazilian beef exports to China, the industry continues to evolve in response to changing market dynamics and global demand trends.