China's Demand for Brazil Corn Concerns Meat Processors, Lobby Group Says

The expectation of large Brazilian corn exports to China in 2023 is worrying Brazil's meat companies in a large producing state, according to a statement from Santa Catarina's meat processors lobby Sindicarne on Monday.

The group said competition from Chinese buyers is already reducing local supplies and making corn used to feed poultry and pork an "overpriced" commodity.

"Even with the sector being more prepared for negotiations and more attentive to its stocks and purchases, there is always competition from the international market," Sindicarne said. "For 2023 the signs are worrying."

Brazilian corn exports to China were cleared late last year after both nations updated trade protocols. Since then, several vessels were booked by companies like Cofco.

At Brazil's southern port of Paranagua, for example, corn exports jumped to almost 570,000 tonnes through Jan. 29 driven by China. This corresponds to a 161% rise in volume compared with the whole of January 2022, the port authority said.

According to Sindicarne, which represents global poultry and pork processors including JBS and BRF, the government must also "do its part" to attract investments aimed at reducing Brazil's logistical bottlenecks.

The group said that while Brazil has created a decent logistics network to export grains, there are no railroads connecting grain regions in the center west to southern Brazil, where pork and chicken are typically raised and processed.

Sindicarne believes that the threat of global recession and food inflation represents a chance for Brazilian companies to serve even more markets.

“We cannot miss the opportunity," the statement said quoting Jose Ribas Junior, Sindicarne's president.

(Reporting by Ana Mano Editing by Steven Grattan)