Iran sanctions force Brazil beef exporters to re-route shipments
20 Dec 2019

U.S. sanctions against Iran have forced Brazilian beef exporters to re-route shipments through nearby countries, adding to costs but largely maintaining trade flows, according to exporters and trade data compiled by two industry groups.

Meatpackers now send much of their Iran-bound beef to other ports in the Middle East, where it can be shipped onward by road, according trade groups Abiec and Abrafrigo, which represent Brazilian beef companies including Marfrig Global Foods SA and Minerva SA.

U.S. measures targeting everything from oil sales to shipping and financial activities have deterred many foreign banks from all Iranian business, including exempt humanitarian deals. That means that exporters face problems concluding new deals with Iran because the banks will not process payments from the country.

One exporter, who asked not to be named due to the sensitivity of the issue, said direct sales to Iran were halted because it was “unable to receive payments” from buyers there.

Brazil saw a 31% drop in the value of direct beef sales to Iran in the first 11 months of 2019, to $214 million, according to government data compiled by Abrafrigo. Volumes fell by 23% to 60,414 tonnes.

“The alternative is to offload products at ports in Jordan, Dubai and Turkey from where they go to Iran by road,” said Antônio Camardelli, Abiec president. “There are limited shipping options to Iran.”

Turkey has been an intermediary destination of choice, said Camardelli and an Abrafrigo spokesman.

Beef export volumes from Brazil to Turkey rose by 373% between January and November to 26,104 tonnes, according to an Abiec presentation last week. By value, sales to Turkey rose 351 to $93.5 million in the period.

Turkey typically imports live cattle for domestic slaughter and nearly all of its imported beef cuts are sent onward to neighboring Iran.

By Ana Mano, Reuters, 19 December 2019

Read more at Reuters

Photo (cropped and edited): Bernard Dupont [CC BY-SA 2.0] via Flickr

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