Cepea, September 17 2019 – CATTLE – Prices for beef (beef carcass, cash price, traded in the wholesale market of the Greater São Paulo) have been higher than that for fed cattle arroba (ESALQ/B3 Index for fed cattle, cash price, São Paulo State) since Dec. 2016.
In the first fortnight of September, the gap between beef and fed cattle quotes was at 3.09 Reais per arroba, with fed cattle prices averaging 156.96 BRL and beef carcass prices, 160.05 BRL. This is one of the narrowest price gaps in 2019, only wider than that in April, at 3.08 Reais per arroba.
This narrower price gap is linked to the sharper price rises for fed cattle than for beef – from August to September, the average fed cattle price rose 1.6%, against 1.5% for beef, in real terms.
Despite the lower demand for beef in Brazil, the demand from the international market continues high – Brazil has been exporting more than 100 thousand tons of in natura beef for 14 months already. As for fed cattle, the low supply of animals in the offseason period is underpinning quotes.
EXPORTS – Brazilian beef exports (in natura) totaled 126.5 thousand tons in August, 2% less than in July and 12.4% less than in August/18, according to data from Secex. Between January and August 2019, the volume exported totaled 934.321 thousand tons, 15.4% larger than that from the first eight months of 2018 and a record for the period.
China, which, along with Hong Kong, receives almost 40% of the Brazilian beef exported, has certified 17 new slaughter facilities in Brazil to ship in natura beef, which may increase even more the Brazilian exports.
HOG – Higher demand for pork meat and live pig pushed up quotes for both in the Brazilian market in the first fortnight of September.
Between August 30 and September 13, the sharpest price rises for live pig were observed in southern Brazil. In Western Santa Catarina, quotes averaged 4.29 BRL per kilo on Sept. 13, 5.4% up compared to that on August 30. In the SP-5 region (Bragança Paulista, Campinas, Piracicaba, São Paulo and Sorocaba), live pig prices rose 4.5%, to 4.55 BRL per kilo on Sept. 13.
As for pork meat, in the wholesale market of the Greater São Paulo, the special pork carcass was traded at 6.81 BRL per kilo, on average, on Sept. 13, 8.1% up compared to that on August 30. The common pork carcass, in turn, was traded at 6.44 BRL per kilo, 2.4% up in the same comparison.
EXPORTS – After reaching, in July, the largest volume shipped this year, at 66.91 thousand tons, the Brazilian exports of pork meat decreased sharply in August, frustrating agents’ expectations. Even China imported smaller amounts of the Brazilian pork meat between July and August.
According to data from Secex, in August, Brazil shipped 50.81 thousand tons of pork meat, 24.06% less than it did in July and 19.74% less than in August/18. China, Hong Kong, Chile and Uruguay, in that order, were the main destinations for the Brazilian pork meat last month, and all of them lowered purchases compared to that in July. China imported 18.48 thousand tons, 22% less than in July, followed by Hong Kong, which purchased 9.47 thousand tons, 31% down in the same comparison, Chile (33% down, to 3.62 thousand tons), and Uruguay (18% down, to 3.14 thousand tons).
Brazilian sales to Russia, which was the number one destination for the Brazilian pork meat until 2017, have been oscillating. Last month, exports to Russia increased 33%, totaling 2.07 thousand tons. However, despite this increase, the amount imported by Russia in August is still much smaller than that before the ban. In August/17, for instance, Brazilian exports to Russia totaled 25.88 thousand tons.
Although exports performance was low in August, Brazil managed to increase sales to countries that do not have a significant share in the total Brazilian shipments. From July to August, for instance, exports to Angola, Ivory Coast and South Africa increased by 19%, 78% and 79%, respectively. Altogether, these countries imported 3.39 thousand tons of the Brazilian pork meat in August.
POULTRY – The Brazilian exports of broiler meat in August frustrated the agents from the national poultry sector. The volume shipped during the month was the third smallest in the year and much smaller than that shipped in July/19 and in August/18 – only larger than the amounts exported in January and in February 2019.
According to data from Secex, in August, Brazilian broiler exports totaled 325.4 thousand tons, 16% down compared to that in the previous month and 18% down compared to that in the same period last year. Among the main destinations for the Brazilian broiler are China, which lowered purchases by 29%; Saudi Arabia, by 7%, and Japan, by 23%.
Despite the sharp decrease in the total imported by China, the Asian country is still the number one destination for the Brazilian broiler meat, followed by Saudi Arabia and Japan – it is worth to mention that, in July, sales to Japan were higher than to Saudi Arabia. Besides, the gap between the amounts sent to these countries narrowed. While in July shipments to China were 9.5 thousand tons higher than that sent to Japan (which at that time was the number two destination), in August, that gap narrowed to 28.98 tons – and Saudi Arabia became the number two destination for the Brazilian broiler meat.
BRAZILIAN MARKET – Between August 30 and September 13, broiler meat quotes remained firm in São Paulo city. On Sept. 13, frozen chicken prices averaged 4.37 BRL per kilo in the wholesale market of the Greater São Paulo, 2.5% up in the fortnight. According to agents from the sector, higher sales, typical at the beginning of each month, pushed up prices.
In the remaining regions surveyed by Cepea, quotes dropped. Chilled chicken prices averaged 5.19 BRL per kilo in Porto Alegre (RS) on Sept. 13, 3.3% down compared to that on August 30.