Latin America Food Manufacturers: Protein & Livestock Weekly, China‘s Pause Could Remove More Supply Than It Creates

Research evidence excerpt

Latin America Food Manufacturers: Protein & Livestock Weekly, China‘s Pause Could Remove More Supply Than It Creates

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18 Jun 2026 00:04:22 ET │ 23 pages

Latin America Food Manufacturers

Protein & Livestock Weekly. China's Pause Could Remove More Supply

Than It Creates

Renata Cabral AC

CITI'S TAKE +55-11-4009-7561

China does not disclose real-time utilization of Brazil's beef export quota, renata.cabral@citi.com

making the exact exhaustion date an inference. Our assumption that the 2026 Luis Felipe Terzariolquota should be exhausted around end-June is therefore based on industry

checks. While the implied displacement versus 2025 exports appears +55-11-4009-3564

significant (~550kt), we believe the resulting oversupply risk may be less severe luis.terzariol@citi.com

than the headline figure suggests. Brazil's tightening cattle cycle should

remove roughly 450-500kt of beef supply in 2026, broadly offsetting the

volume at risk. In addition, the temporary interruption of China exports

removes an important source of industry liquidity, which should

disproportionately pressure smaller processors and encourage production

discipline. As a result, industry slaughter volumes could decline by roughly 5-

10% in Q3, with the adjustment concentrated among smaller players.

Timing Remains a Black Box. China provides limited visibility into quota utilization,

meaning the industry has to rely on export flows, shipment data and industry

checks. Based on our conversations, production destined for China has already

slowed materially and much of the industry is preparing for a temporary pause.

Importantly, we do not expect exports to fall to zero. Our base case assumes residual

exports of roughly 20-40kt per month versus a normal run-rate of approximately