Photo: SAO PAULO, BRAZIL - MARCH 09, 2006: Meat processing in food industry / Alf Ribeiro / Shutterstock.com
Brazil is one of the world’s top halal beef exporters, earning revenues of $5.9 billion in 2015. With the reversal of Saudi Arabia’s ban on Brazilian beef exports, there are substantially more opportunities for exporters, supported by robust halal certification. How can beef producers take advantage of the halal market opportunity?
|YOUR PAIN POINTS ADDRESSED
|Scenario: You are a Brazilian beef supplier seeking to address the needs of the global Muslim consumer base
How robust is the market for halal beef in Brazil?
|How significant is Brazil’s halal beef export market opportunity?
|What role do halal certifiers play in supporting Brazil’s halal beef market opportunity?
|What challenges does the industry face?
Brazil is home to more cattle—209 million—than any other country and the nation has nearly as many cows as people. It should come as no surprise that the South American powerhouse is one of the world’s biggest beef producers and exporters, almost a quarter of which is halal.
In 2015, almost a quarter of Brazil’s beef exports were bound for the Middle East and North Africa (MENA) region, and so far in 2016, exports have risen 7 percent due to Saudi Arabia lifting its ban on Brazilian beef. Brazil hopes to boost future growth by ending its trade dispute with Indonesia.
Brazil’s beef production in 2015 reached 9.56 million tons carcass-weight equivalent (CWE), according to the Association of Brazilian Beef Exporters (ABIEC). Most meat is for domestic consumption, while some 20 percent is exported.
“With 1.5 million tons shipped, Brazil in 2014 posted a record $7.2 billion in revenue,” Antonio Jorge Camardelli, President of ABIEC, told Salaam Gateway. “In 2015, the volume shipped was 1.39 million tons with a revenue of $5.9 billion. The decline was the result of temporary problems that negatively affected some major markets, including Russia, Hong Kong, and Venezuela.”
Russia and Venezuela are going through major economic problems, while Hong Kong mainly re-exports beef to China, but imports have dipped in recent years due to Beijing increasingly liberalizing its market.
“Export to countries in the Middle East and North Africa (MENA), excluding Israel, reached a total of $1.4 billion in 2015, equivalent to 24 percent of all shipments that year,” said Camardelli.
The main MENA destinations are Egypt, Iran, Algeria and the United Arab Emirates (UAE). The lattermost alone imported some 18,000 tons of Brazilian beef in 2015.
“Export to the MENA region, which requires halal certification, witnessed a sharp increase in 2016, climbing by 7.38 percent from 254,000 tons to 273,000 tons in the period from January to August 2016,” said Camardelli. “Saudi Arabia represented 7 percent of the volume increase and a revenue of $77 million.”
Saudi Arabia’s 2012 ban on Brazilian beef imports following an atypical case of bovine spongiform encephalopathy (BSE) was lifted in November 2015, and the first beef shipments to the kingdom resumed in February 2016.
There are three halal certifiers in Brazil, the largest of which is the Federation of Muslim Associations of Brazil (Fambras). Founded in 1979, Fambras is an umbrella organization for 48 Islamic societies and mosques across the country.
Fambras’ sister organization, the Brazilian Islamic Center for Halal Food Stuff (Cibal Halal) focuses on halal auditing and supervision. Together they employ 680 people, some 500 of whom work as butchers and supervisors in 80 processing facilities across the country that are halal-certified.
“Our certification meets all of the world’s main halal standards whether issued in Indonesia, Malaysia or the Arab countries,” Nizar Ghandour, Fambras’ International Relations Manager, told Salaam Gateway. Currently, Brazil has some 300 halal-certified companies.
“Most operate in the beef and chicken sectors, but we increasingly also issue halal certification for ingredients, cosmetics and medicine,” said Ghandour. “In fact, we just issued the first halal certification for Brazilian pharmaceutical companies that aim to export to the Arabian Gulf.”
Despite Brazil being one of the biggest beef producers in the world, halal meat is hard to find within the country, especially outside the main urban centers of Sao Paolo and Rio de Janeiro.
Brazil has a population of around 210 million, according to government figures, while only 1.5 million are Muslims, mainly of Lebanese, Syrian, Egyptian and Palestinian descent.
Fambras works to raise halal awareness and distributes halal meat through its vast network to mosques and Islamic associations.
“But the domestic halal market remains very small,” said Ghandour. “Future growth for Brazilian beef lies abroad, especially in the Far East.”
Currently, Malaysia is only a minor importer of Brazilian beef, while Indonesia closed its market in 2009. As a consequence, Australia has been able to consolidate its position as the main supplier of beef to the world’s largest Muslim country.
“In 2009, the Indonesian Supreme Court ruled that the principle of regionalization, which was recognized as part of the World Trade Organization (WTO) accord on Sanitary and Phytosanitary Measures (SPS), was unconstitutional,” said Camardelli.
The principle of regionalization is a non-binding WTO guideline, which holds that restrictions on products from areas hit by health concerns such as Food and Mouth Disease (FMD) do not necessarily apply to the whole country.
The 2009 Indonesian animal husbandry law embraced the WTO principle and thus allowed for imports of beef and cattle from "disease-free zones". Local farmers and veterinarians, however, argued this could pose a significant risk to native livestock. The Indonesian Supreme Court ruled in their favor.
According to Camardelli, the ban consisted of a wide array of measures, including customs constraints, sanitary barriers and licensing regimes, which “unfairly bans Brazil’s access to the Indonesian beef and cattle market.”
Brazil in 1992 introduced the National Program to Eradicate FMD. Since then, there have only been sporadic and relatively small outbreaks.
Encouraged by the Indonesian government’s decision to revoke a four-year ban on beef and cattle imports from Japan, the Brazilian Ministry of Foreign Affairs in 2014 brought the trade dispute before the World Trade Organisation. The case is ongoing but recent developments may play in Brazil’s favor.
As Saudi Arabia reversed its ban on Brazilian beef in November 2015, the United States Department of Agriculture (USDA) in 2016 overturned its ban on fresh and frozen Brazilian beef, allowing imports for the first time since 2003.
A USDA analysis concluded that fresh and frozen beef from Brazil produced only a “low” FMD risk for any U.S. livestock. Brazil will no doubt play its American card in trying to gain access to the potentially very lucrative Indonesian halal market and bolster exports to other Asian countries as the demand for beef rises.
|Secure certification: Take stock of Brazil's robust halal certification landscape and work with certifiers to take the first step into a lucrative global industry
|Establish your key Organisation of Islamic Cooperation (OIC) export markets: Look at Indonesia, Malaysia and the MENA region as core export opportunities and establish key relationship to support growth
|Don't forget the U.S.: The U.S. in itslef represents a tremendous opportunity with close to 5 million Muslims
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