A large shipment of bulls from Brazil is on its way to Vietnam, export industry sources have told Beef Central today, in a development that introduces new competition for Australia in its second largest market for live cattle, and at a time when demand for beef in the communist nation is coming under pressure due to a Delta variant COVID outbreak.
The MV Nada was loaded with around 14,000 bulls in the Brazilian port of Vila Do Conde this week and is now enroute to the Vietnamese port of Thi Vai, scheduled to arrive in late September.
Brazilian company Minerva Live Cattle Exports, a subsidiary of Minerva Foods, one of South America’s largest beef processors and exporters of live cattle, which also made headlines today after buying two Australian meat processing plants, is handling the export shipment.
The export deal is believed to involve a collaboration between a Vietnamese Government-connected enterprise and a current importer of Australian cattle, with the imports intended to ensure food security for the army, as outlined in this article from Monday authored by Asian based agricultural trade consultants Dr Michael Patching and Dr Rodd Dyer.
It is not yet clear if the shipment has been coordinated under a special “one-off” permit for the purposes of food security by the Vietnamese army, which is currently overseeing food distribution in Vietnam amidst strict COVID lockdowns, or whether it represents the formal establishment of a new longer-term trade protocol.
As Beef Central has previously reported Brazil has been working to gain access for its live cattle exports to Vietnam for several years. The longer sea distances involved have been a key factor hindering the trade’s development over that time, but record high prices of Australian cattle have tipped the economics in favour of Brazilian cattle in the current market.
Australian cattle enter Vietnam under a preferential zero tariff rate while Brazilian cattle incur a 5 percent import tariff.
However Brazilian exporters are not required to operate under the same animal welfare assurance system as Australian exporters, under the Australian Government’s mandatory Exporter Supply Chain Assurance System (ESCAS), which adds significant additional costs to Australian livestock in export markets not carried by competing export nations.
The shipment comes as Vietnam battles to control a severe Delta-driven COVID outbreak.
The communist nation led the world in its rapid response to and successful handling of the COVID pandemic throughout 2020, but in the past month has been inundated by record high-infection rates, averaging over 10,000 new infections per day, driven by the more infectious Delta-variant.
The country has imposed severe lockdowns to contain the surge in infections, which has hit the country’s food industry hard and in turn demand for beef from imported cattle.
Five cattle ships have been loaded in Townsville for Vietnam this month, fulfilling orders that were arranged before the Delta wave took full affect in Vietnam.
Exporters say further shipments from the port are now unlikely for some weeks and possibly months until Vietnam’s economic conditions return to more normal conditions, which will subdue live export demand in north Queensland for 400kg plus steers suitable for Vietnam.