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Beef Industry on High Alert Following China’s Announcement of Import Investigation

Beef Industry on High Alert Following China's Announcement of Import Investigation Alert, beef, China, Giants, imports, JBS, Marfrig, Minerva, probe Food and Beverage Business

China has initiated a probe into beef imports, a strategic move by Beijing aimed at bolstering its domestic meatpacking industry.

Following this announcement, shares of Brazil’s JBS—recognized as the world’s largest meat company—alongside local competitors Minerva and Marfrig, experienced a decline. This news was made public by China’s Ministry of Commerce on December 27.

Xinhua, China’s state-controlled news agency, reported that the inquiry was prompted by a request from the China Animal Agriculture Association and nine other industry associations from major beef-producing regions advocating for the local beef sector.

The investigation is set to assess whether the influx of imported beef has negatively impacted the domestic industry.

This probe will scrutinize bovine meat imports from January 1, 2019, to June 30, 2024. While the investigation is expected to conclude within eight months, it may be extended under unique circumstances.

Xinhua quoted a ministry spokesperson, affirming that regular trade will remain unaffected during the investigation period.

In response to the investigation’s announcement, the Brazilian government stated that it “will work together with the export sector to demonstrate that Brazilian beef exported to China does not harm the Chinese industry.”

As the world’s largest beef buyer, China has seen its imports surge by over 70% since 2019, according to the US Department of Agriculture. Hence, any protective measures implemented may adversely affect major exporters from Brazil, the US, Argentina, and Australia.

Notably, Brazil accounts for nearly half of China’s total beef imports.

In 2024, Brazilian beef exports to China surpassed 1 million tons, marking a 12.7% increase compared to the same timeframe in 2023, as reported by the Brazilian government.

Earlier in April, JBS announced an investment of 150 million reais ($28.3 million at the time) to double its processing capacity at the Campo Grande II facility, which has been approved by the Chinese government for beef exports to China.

That investment will enable the processing of 4,400 animals daily within a year, up from 2,200, and will also lead to an increase in employees from 2,300 to 4,600.

In the context of this probe, China’s Ministry of Commerce referred to it as a “safeguard investigation.”

The ministry is following up on claims that the import volume of beef has surged sharply in recent years, specifically noting a 106.28% increase in the first half of 2024 compared to the same period in 2019.

Furthermore, the ministry indicated that the applicants argue this sharp increase has caused significant damage to the domestic industry, asserting a causal link between the import volume rise and the reported harm.

According to legal protocols and World Trade Organization regulations, investigatory authorities can initiate a safeguard investigation upon receiving requests from domestic industries that contend a spike in imports is causing or threatening significant damage to similar or competing products.

In August, China announced an investigation concerning subsidies related to dairy imports from the EU, a move widely interpreted as part of an escalating trade dispute.

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