Chinese quota could slash Brazilian beef exports by R$4.5bn

That volume represents barely half of the 1.68 million tonnes of fresh beef China purchased in 2025, and the shortfall could cost Brazilian meatpackers as much as $4.5 billion in revenue. Companies have already moved to cut costs and scale back production.

The decline stems from China’s new safeguard measure, which caps Brazilian beef imports at 1.1 million tonnes for 2026. Because Beijing counts cargoes shipped in 2025 but cleared through customs this year, Brazil’s actual 2026 exports will fall short of the authorized ceiling. Through June, 794,600 tonnes had already reached Chinese ports.

Abiec now puts the revenue hit at $4.5 billion, based on the 748,000 tonnes of lost volume valued at the average price of shipments to China between January and June—$6,100 per tonne. At the start of the year, the industry had projected a smaller decline of 600,000 tonnes and $3 billion in lost revenue, using 2025’s average price of $5,000 per tonne—an estimate that did not yet account for the carryover of 2025 cargoes toward this year’s quota.

Brazilian processors have already halted production of certain cuts and suspended shipments to China starting in July, on the assumption that the quota has been exhausted. Chinese authorities have not yet confirmed the official figures.

Industry expectations are that slaughter lines dedicated to the Chinese market will resume in the fourth quarter, allowing exports to restart in mid-November. Given the roughly 40-day sea voyage, those cargoes would arrive in China in 2027, counting toward next year’s quota and avoiding the additional tariff.

“Everyone knows how exposed we are to the Chinese market. We’re learning to live with this new reality,” Perosa said at a press conference Thursday (16). “It’s a significant drop [to 900,000 tonnes]. It will show up in our numbers, weigh on the trade balance and reduce Brazil’s overall export volumes. We expect sales to other markets to pick up, but not enough to offset what we’re losing in China.”

Sales to China surged in the first half of the year as exporters rushed to ship under the 12% tariff before the quota closed, seeking to avoid a steeper 55% surcharge. The resulting competition for supply pushed prices higher, though it remains unclear whether that pace and those price levels could have held through the second half of the year.

Perosa said the industry will need to work to keep the drop in export volumes from deepening further. Overall, Abiec expects exports to end 2026 down 10% from 2025, when Brazil shipped 3.5 million tonnes. “We’re working to hold that line, but the challenges are real,” he said.

The fallout is already visible across the sector. Perosa said all Abiec member companies—which account for 98% of Brazil’s beef exports—have taken steps to adapt to the halt in sales to their top customer, including collective furloughs, layoffs, shortened shifts, reduced slaughter volumes and other measures. Many are currently operating at a loss.

“We’re having to make more adjustments on the production side than on distribution, but it varies by company. All of them are struggling, from the largest down to the medium-sized and small players,” he said. Perosa added that the squeeze could accelerate industry consolidation, with larger players moving to acquire smaller ones.

Beyond the exhausted China quota, Perosa said there is a “strong possibility” that exports to the European Union will be suspended starting in September, as Brazil has yet to provide sufficient technical evidence that cattle destined for the EU market are raised without antimicrobials—a setback that would further dent exporters’ revenue.

“It’s a high-value market that takes cuts with no outlet in Asia, and it’s an important part of our product mix. Exports there help ease pressure on domestic price formation,” Perosa said, adding that access to the European market also bolsters the “reputation” of Brazilian beef. “When the EU takes a position, it affects every other market,” he noted.

With both China and the EU curtailing demand, global appetite for Brazilian beef is set to shrink. Reduced competition for the product is expected to weigh on export prices, though Abiec has yet to finalize a forecast. Between January and June, Brazil exported 1.7 million tonnes of beef—up 15.5%—generating $9.8 billion in revenue, a 36.2% increase over the first half of 2025. Average prices climbed nearly 18%, to $5,700 per tonne.

Perosa said the drag on export revenue will eventually filter through to the domestic market, potentially pushing up beef prices for Brazilian consumers over the medium term.

“Prices in the domestic market may ease at first, but costs haven’t come down. Production is likely to fall, and as supply tightens, prices will rise again—that’s the rebound effect we’re seeing,” he said.