Brazil's BRF, JBS shares slump after China suspends meat imports

A truck is pictured at the Brazilian meatpacker JBS SA after a Brazil's Federal Police operation in Brasilia, Brazil March 17, 2017. REUTERS/Ueslei Marcelino

SAO PAULO (Reuters) - Shares of meatpackers BRF SA and JBS SA slumped on Monday after China and other countries temporarily suspended imports of Brazilian meat following a scandal over alleged bribery of inspectors.

Common shares in BRF and JBS dropped as much as 10 percent early on Monday, making them the biggest decliners by far on Brazil’s benchmark Bovespa stock index.

A source told Reuters China’s temporary imports ban is a “precautionary measure.”

Earlier in the day, Bloomberg News had reported that Brazilian beef products currently on the way to China would not get clearance at customs, citing a source who was notified of the decision.

Credit Suisse Securities analyst Victor Saragiotto wrote in a Monday note to clients that the scandal “could be enough to compromise temporarily Brazilian protein’s acceptance worldwide.”

South Korea temporarily barred sales of BRF chicken products on Monday. The European Commission said any companies found to be involved in the scandal there will be denied access to the European Union market.

Reporting by Bruno Federowski; Editing by Lisa Von Ahn