Wednesday, November 12, 2014

Brazil’s beef sales to Russia surge

Russia is buying a lot more beef from Brazil to make up for its ban on meat from Europe, Canada, the United States, Australia and New Zealand.

Russia’s bans follow the Western countries’ economic sanctions related to Russia’s taking of Crimea and support for separatists in Eastern Ukraine.

Russia became Brazil’s largest beef customer in October, buying 36,800 tons.

Brazil is now on track to set a record for annual beef exports.

Through the first 10 months of this year, Brazilian beef exports are up 9.5 percent by revenue and 5.1 percent by volume over the same period in 2013, totaling 1.3 million tons worth $6 billion.

Until October, Hong Kong was the biggest buyer of Brazil’s beef, taking 326,000 tons worth $1.38 billion so far this year.

That’s 6.6 per cent more tonnage and 13.8 per cent more dollars than the same 10 months last year.

By comparison, Canada exported 598,000 tonnes of beef in 2012, according to Canada Beef Inc.

The trading bans and economic sanctions never work because nations always find another way. As one man recently explained, using oil as an example, he said there is global production and global demand flowing in and out of a common pool; if one entrance or exit is blocked, the oil will simply flow through different entrances and exits.

Of course, the price is affected by plugging either an entrance or exit.