Cepea, March 17, 2021
CATTLE – The shorter month of February and the Chinese New Year reduced the Brazilian exports of in natura beef last month to the level registered in January/2019. Despite this decrease, monthly shipments have been higher than 100 thousand tons since early 2018, showing that the international market continues relevant to Brazil.
In February, Brazil exported 102.12 thousand tons of beef, 4.85% less than the volume shipped in January and 7.64% down from that in February 2020, according to Secex.
In the first two months of 2021, Brazil exported 209.45 thousand tons of beef. It is worth to mention that the total volume exported in the first two months of 2020, of 227.59 thousand tons, is the current record in the series of Secex.
If, on the one hand, exports pace has been slower this year, on the other hand, the prices paid for the in natura beef exported increased by 1.57% in 12 months, averaging 4,539.33 USD in February/21, the highest level since January 2020.
Despite the higher prices paid for the Brazilian beef, the revenue received from exports dropped by 4.23% between January and February and by 6.2% compared to that in Feb/2020, to 463.59 million USD. This scenario is linked to the lower volume shipped in the month. In Real, on the other hand, the strong dollar helped to push up revenue by 1.84% compared to that in Jan/21, to 24.611 billion BRL in Feb/21.
BRAZILIAN MARKET – Fed cattle prices continued on the rise in the Brazilian market in the first fortnight of March, influenced by the low supply of animals ready for slaughter and the recent increase in beef exports.
On the other hand, the prices for the beef carcasses sold in the wholesale market of the Greater São Paulo were weak in that period. According to wholesalers, there were difficulties to pass on to beef the continuous valuations of fed cattle arroba. Besides lower domestic demand – due to the current low purchase power of the population in Brazil –, the sales pace for beef in the wholesale market became slower because of the high price levels for beef.
As fed cattle prices are rising more sharply than beef quotes, the price gap between these products widened in the first half of March.
The fact that beef prices have been much lower than fed cattle’s affects the profit margins of the slaughterhouses that sell beef only in the domestic market, since those that export the product receive payment in dollar.
HOG – The Brazilian exports of in natura pork meat increased in February, after having decreased in November and December 2020 and in January 2021. The daily average of shipments last month was the highest in the last six months. According to data from Secex, in February, Brazil exported 4 thousand tons of pork meat per day, on average, 40.4% up from the average in January. This increase was already expected by agents from the poultry sector. The exports performance in January was linked to the decrease in the purchases from China.
Despite the fast exports pace, the lower number of working days in February limited the total volume exported in the month. In the 18 working days of February, Brazil exported 71.5 thousand tons of pork meat, 28.1% up from that in January and 23% above that from Feb/2020.
As regards the revenue from shipments in February, the Real depreciation against the US dollar favored the total received by Brazilian exporters. In February, revenue from exports totaled 940.12 million BRL, 27.8% up from that in Jan/21 and 50.8% higher than that in Feb/2020.
BRAZILIAN MARKET – After registering record competitiveness against beef in February, the prices for special pork carcass increased in the first fortnight of March, reducing this advantage. Compared to chicken meat, the price gap widened too, reducing the competitiveness of pork meat against chicken meat.
In the market of pork meat, after dropping consecutively in the first fortnight of February, prices reacted late in the month, which was also observed in the first fortnight of March. However, for the coming days, agents from the sector expect prices to drop, due to the stricter social distancing measures to stop covid-19 in several Brazilian regions, which should limit consumption.
POULTRY – One of the factors that helped to keep liquidity high and inventories low in the Brazilian market of chicken meat in February was the fast exports pace for this protein. Besides the higher daily average of shipments, the increases in the prices of the products exported – which were low last year, mainly in the second semester – and the strong dollar favored the revenue received by national exports.
According to a report from Secex, in February, Brazil exported 18 thousand tons of chicken meat per day, the highest average in the last nine months and 33.9% up from that in January. Thus, shipments totaled 323.8 thousand tons last month, 20.5% up from exports in January.
The average price paid for the Brazilian chicken meat in the international market increased in February for the third consecutive month, to 7.92 BRL/kg, 1.4% higher than the average in January. Besides the price rises, the weak Real compared to the US dollar favored the revenue from exports last month. Thus, revenue totaled 2.56 billion BRL in February, 22.2% up from that in January.
BRAZILIAN MARKET – The demand for chicken meat increased in the Brazilian market in the first fortnight of March, favored by the payment of workers’ wages and the high competitiveness of the product against beef and pork meat. Despite the sales increase in most of the regions surveyed by Cepea, the recent restrictions to non-essential activities are concerning agents from the sector. With the return of the social distancing measures in Brazil and the consequent closure of restaurants and other food services, Cepea collaborators believe that chicken meat sales, majorly in the wholesale market, will decrease.
In the market of live chicken, high production costs pressed down farmers’ profit margins. Thus, these agents asked higher prices for their animals. In general, agents from the poultry sector reported that animal supply has been controlled.