Cantillon: Brazil beats Ireland in race back into China’s beef market

Irish officialdom went into overdrive last weekend for the visit of Chinese premier Li Keqiang.

Several parts of the country were practically on lockdown while Mr Li, China's number two, was ferried about Galway and Mayo in the rain.

With China’s €50 billion beef market wagging its tail in the foreground, it seems nothing was left to chance.

However, for the Chinese, the Irish visit was only a stopover on the way to Brazil, where Mr Li signed off on a series of bilateral trade deals, said to be worth around €47 billion.

One of the deals authorised eight Brazilian beef processing plants to export to China, and 17 more factories are expected to be licensed next month. Make no mistake, Brazil has won the race to get back into China first.

The 26 Brazilian processors destined to trade in China are expected to add $520 million to Brazil’s $7.2 billion beef export trade.

The country did a lucrative trade in the People’s Republic before its products were banned in 2012 after a BSE scare.

Brazil will be hoping to recapture ground ceded to its chief rival Australia, which already ships about $700 million worth of beef annually into China.

The Department of Agriculture here is still endeavouring to get Irish plants cleared to export to China, a complex process.

And to be fair, the ban on Irish beef was only lifted in February, four months after Brazil was given the green light.

Minister for Agriculture Simon Coveney says, however, he expects Irish producers to be selling into China by the autumn.

He believes China will ultimately be a bigger market for Irish beef than the US, presumably because it’s a bigger market and because the Chinese view foreign beef as superior to their own, in contrast to the Americans.

Currently, Ireland is the fifth-largest beef exporter in the world after Australia, Brazil, Netherlands and US, exporting about half a million tonnes, worth about €2.2 billion to the economy.

Going toe-to-toe with these bigger rivals will be tough for an industry used to shipping most of its product next door to Britain.