Cepea, September 17th, 2021
CATTLE – In spite of the ban imposed by China on Brazilian beef exports, due to two cases of mad cow disease registered in Brazil in early September, national shipments continued high in the first fortnight of the month. The good exports performance in the first weeks of September limited the downward trend of fed cattle prices in the Brazilian market.
According to data from Secex (Foreign Trade Secretariat), this month (until Sept. 10), Brazil has exported 86.88 thousand tons of beef (in natura). The daily average of shipments is high, at 12.41 thousand tons, 80% up from that in September last year. Thus, the volume exported this month, so far, accounts for 61.03% of that shipped in Sept/2020 (142.325 thousand tons).
Agents from the sector reported that this increase is linked to a volume that had been purchased earlier and was being prepared for shipment already. Besides, it may also be a reflex of the anticipation of imports by some countries, such as Saudi Arabia, which, on Sept. 14, suspended imports from five Brazilian slaughterers located in Minas Gerais State.
Between January and August, Brazil sent to Saudi Arabica 25.477 thousand tons of beef, 15.1% less than that shipped in the same period last year, which confirms that the country had already been decreasing imports from Brazil. This year, Saudi Arabia has been the seventh major destination for the Brazilian beef, and in August, it was in the sixth position.
The top destination for the Brazilian product in 2021 and in August is China. This year, the Asian country has purchased 596.122 thousand tons of the national beef, and in August, China imported more than 100 thousand tons from Brazil for the first time (almost 106 thousand tons), according to Secex.
Considering monthly volumes, Hong Kong is the second major destination for the Brazilian beef, having purchased 19.29 thousand tons in August. Chile became, last month, the third major destination for the national product, having imported 13.78 thousand tons, followed by the United States, which imported 13.53 thousand tons of beef from Brazil. It is important to highlight that the monthly volumes exported to Chile and the United States in August were both records.
This year, the major destinations for the Brazilian beef, after China, have been Hong Kong (155.6 thousand tons) and the United States (66.49 thousand tons), according to Secex. The USA have been increasing imports from Brazil this year, largely of processed meat. The 66.49 thousand tons shipped to the country this year account for almost two-fold that between January and August 2020 (34.52 thousand tons).
In general, agents believe that the ban imposed by China will not last long, based on the low world supply of beef and the dependence of the country on the Brazilian meat. Besides, China usually increases beef imports in the last months of the year, due to higher demand in the country because of the Chinese New Year.
SWINE – Amid high liquidity, prices for live pig and pork meat react in BR
Sales reacted in the Brazilian swine sector in the first fortnight of September, after beginning the month at a slow pace. Higher liquidity reflected an increase in the demand for pork meat, in both the Brazilian and the international markets. In that context, some slaughterers increased purchases of live pig, which pushed up the prices for animals and pork meat in the first half of the month.
In the independent market of live pig, prices increased in all the regions surveyed by Cepea. In São Paulo and southern Brazil, valuations were higher, since many meat processors are located in these regions, which favored the demand for animals.
On the other hand, in the market of pork cuts, prices did not rise as much, due to the current low purchase power of the population in Brazil and lower competitiveness of pork meat compared to beef and chicken meat.
SLAUGHTER – Data released by the IBGE pointed to an increase in the production of pork meat in the second quarter of 2021. After setting a monthly record in March, slaughter continued high – from June to August, 13.04 million heads were slaughtered, 2.8% more than that in the previous quarter. Besides the increase in the number of animals slaughtered, the average weight increased too, to 93.4 kilograms, 2% up from that in the first quarter of the year and the highest since 2011.
EXPORTS – The Brazilian exports of pork meat decreased in August, totaling the lowest volume in the last six months – shipments to all major destinations were lower last month. According to Secex, Brazil exported 89.9 thousand tons of pork meat (processed and in natura) in August, 11.3% less than that in July and 8.1% below that shipped in August last year.
Agents from the sector reported that international demand was high in August, but exports were constrained by logistic issues, such as lack of containers and low availability of ships – it is important to mention that logistic issues have been observed in other countries too. In China, the port of Ningbo-Zhoushan, the third busiest port in the country, was closed for some time in August, due to restrictive measures to fight new cases of covid-19.
As regards destinations, Brazil sent 42.6 thousand tons of pork meat to China last month, 16.1% less than that shipped in July, according to Secex. To Chile, exports totaled 5.8 thousand tons, 16.3% down in the monthly comparison.
In September, however, exports have been on the rise. According to a report from Secex, in the first seven working days of the month, Brazil exported 40.9 thousand tons of the product, almost half of the total shipped in August. The current daily average of shipments is at 5.8 thousand tons, 57.5% higher than that in August and 61.3% above that in Sept/20 (Secex).
POULTRY – Competitiveness of chicken meat against pork is the lowest in 9 years
In the first fortnight of September, the prices for chicken meat rose higher than that for beef and pork meat in the wholesale market of the Greater São Paulo. Thus, the competitiveness of chicken meat against the other two has decreased for the fourth consecutive month. Compared to pork carcass, the competitiveness of whole chicken this month is the lowest since September 2012.
Cepea surveys show that, on the average of September (considering until Sept. 15), the price gap between special pork carcass and whole chicken is at 1.19 Reais/kg in the Greater SP, 50.4% narrower than that in the same period of August and 80.4% narrower than that in the first half of Sept/2020.
Despite the lower competitiveness, liquidity continued high in the domestic market of chicken meat in the first half of September, which is still the cheapest among the three most consumed meats in Brazil. With balanced demand and supply, the Brazilian poultry sector has been able to pass on production costs to chicken meat, ensuring profit margins.
In the first fortnight of September, the average price for whole chilled chicken closed at 8.25 BRL/kg, 3.9% up from that in the first half of August and 46.2% higher than that in the first fortnight of Sept/20, in nominal terms.
EXPORTS – The Brazilian exports of chicken meat (in natura) decrease in August, however, the high price paid for the product and the strong dollar ensured high revenue (in Real) to the sector.
According to Secex (Foreign Trade Secretariat), in August, Brazil exported 351.14 thousand tons of chicken meat (in natura), 10.3% less than that shipped in July, but 3.1% more than that from August/20.
Although the demand for meat is currently high worldwide, some logistic issues constrained shipments last month. In China – the top destination for the Brazilian meat –, the temporary closure of one of its major ports hampered Brazilian exports to the country in the second fortnight of August. Besides, national agents also reported lack of ships and containers.