China Approves Brazil Swine-Offal Exports as Pig Fever Rages

(Bloomberg) -- The ripples from the outbreak of African swine fever in Asia have reached Brazil's market for offal.

China, which is boosting meat imports to fill a supply gap after the hog disease decimated half its herd, just approved shipments of swine offal, or organ meats, from seven plants in the South American nation, Brazil Agriculture Minister Tereza Cristina said Monday. Meat giants JBS SA and BRF SA are among the companies granted with permissions and can start shipments immediately.

Brazil didn't previously have access to China's swine-offal market, and the opening may result in $2 billion shipments next year, according to the Agriculture Ministry. Sales to the Asian nation could pay at least double compared with exports to Hong Kong, said Ricardo Santin, a director at the exporter group ABPA. The latter has been the No. 1 destination for supplies from Brazil, according to government figures that are in dollar terms.

“It's a very relevant news in financial terms,” Santin said in a telephone interview.

The new approvals were granted for plants located in Santa Catarina state, which has the highest sanitary status in the nation. China approved two JBS facilities and one BRF plant, and shares of both companies jumped on prospects of rising exports. The co-operative Aurora and Pamplona Alimentos had more two units allowed each, the ministry said.

This year, Brazil's pork exports to China have jumped 38% through October, while revenue from the shipments surged 67%, according to government data. Hog offals exports totaled 50,200 tons from January to September, representing 10% of Brazil's pork shipments.

Rising demand has sent hog prices soaring more than 30% over the past year in some regions of the South American country, according to Cepea, the University of Sao Paulo research arm.

To contact the reporter on this story: Tatiana Freitas in São Paulo at tfreitas4@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Reg Gale, Joe Ryan

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