(Yicai Global) Nov. 28 -- Brazil's biggest exporter of live cattle has agreed deals with Alibaba and five other Chinese firms for the supply of frozen beef to the country over five years.
Athena Foods has signed memoranda of understanding with the companies, according to a statement from parent company Sao Paulo-based Minerva, which didn't name the other parties.
The deal, agreed at the recent China International Import Expo in Shanghai, will bring the company around USD600 million in annual export income, Reuters reported Iain Mars, chief executive at Athena as saying.
China has an unlimited demand for South American beef, Mars told investors and analysts, adding that the deal with Alibaba is worth nearly USD100 million a year while the other five are in a similar range.
The country's beef imports are increasing every year with the 738,000 tons brought in during the first three quarters this year already eclipsing the 700,000 tons imported for all of 2017, customs data shows.
There is a great price disparity between China and Brazil. Beef goes for CNY16 to CNY18 (USD2.3 to USD2.6) per kilogram in Brazil and CNY50 to CNY60 in China. The cost of imported beef after custom clearances is CNY30 to CNY32 per kg which is almost the half domestic prices.