Brazil is opening the doors of the Chinese market to dairy products. Earlier this month, China received the first cargo ever. Two years after the consolidation of the opening of the market, with the qualification of the Brazilian plants for exportation, Central Cooperativa Gaúcha Ltda (CCGL) sent on the 5th a small volume of powdered milk by air, from the airport of Guarulhos, in São Paulo, to Shanghai.
Emblematic, the deal is with one of the largest dairy products consuming markets in the planet, whose imports are booming. “We believe very much in this market for the future,” CCGL CEO Caio Vianna told Valor. The company registered revenues of R$1.4 billion in 2020.
First Brazilian group to seek qualification to export to China, CCGL will use this sale to try to expand business in the country, where it already has a registered trademark. The import was carried out by a partner company of the cooperative, which will now do the work of a commercial correspondent to advertise and sell the cooperative’s products. Two more containers of powdered milk have already been negotiated and should be shipped soon.
The exported cargo included powdered whole milk, skimmed milk powder, and zero lactose milk powder – an item that requires the application of a lot of technology and may be of interest to the Chinese public, says the CEO. “The objective of the first export is to have the product in China so that we can work commercially. We have opened a channel with the largest consumer market in the world,” said Mr. Vianna, who did not reveal the value of the negotiation.
Brazilian dairy products began to be qualified to export to China in 2019, but the certification had been agreed with the Asian country since 2007. Currently, 33 companies have the approval to trade with the Chinese.
To make the sale possible, CCGL had to adapt to the bureaucracies and sanitary requirements of Beijing, which required patience and investments in management, registration, monitoring, and traceability. The cooperative has 3,500 supplying producers and an installed processing capacity of 3.2 million liters per day at the Cruz Alta plant, in the southern state of Rio Grande do Sul.
About 60% of the volume of 1.7 million liters of milk received daily by the central from 30 affiliated cooperatives come from properties certified by the program “Leite Mais Saudável” and are tuberculosis and brucellosis free. The products sent to China come from those producers. Sanitary requirements were also overcome to prove the absence of contaminants in the Brazilian products common in dairy products from other countries.
“We have to be able to trace the product from the farm, with the producer’s name, and all the processing within the plant. We had to explicitly and individually identify the products in the export documents. It is laborious and complicated,” said Mr. Vianna.
The goal is to make the production known and reliable in order to eliminate some requirements in the next shipments. “In large volumes it will be very complicated; these are adjustments that will have to be made as the process evolves.
CCGL has already exported to Algeria and other African countries. Foreign sales are an option to correct market distortions, said Mr. Vianna, given the seasonality of production and domestic prices. “It is good to export because the domestic market is locked, some exports are necessary to take the pressure off stocks,” he pointed out.
According to Mr. Vianna, the agreed prices for the cargo destined for China were similar to those of the domestic market. “It is a first step for other companies to adapt and look for commercial partners. Let’s hope that the market and the exchange rate allow us to have a positive balance.”
The Brazilian Association of Dairy Products (Viva Lácteos) still does not have an estimate of the potential exports to China but says that other companies are prospecting business. The goal is to achieve a performance similar to that achieved in Russia, whose market was opened in 2014. Today, four containers are sent per month to the Russians, with high added value products. “We are slowly conquering the taste of foreign consumers,” says the head of the organization, Gustavo Beduschi.
Source: Valor international