Cepea, June 17, 2929 – CATTLE – With the firm demand from China, Brazilian exports of in natura beef continue at record levels. This scenario added to the low supply of animals ready for slaughter – primarily in the last weeks, when the offseason began in Brazil – continued to underpin fed cattle prices in the domestic market.
In the first half of June, the CEPEA/B3 Index for fed cattle (São Paulo State, cash price) averaged 205.14 BRL, 2.7% higher than that in the first fortnight May.
The average in the first fortnight of June was also the third highest in the Cepea monthly series, which started in 1994, only after the real record registered in December 20, at 215.77 BRL, and that in November 2019, at 208.33 BRL. On June 15, the Index closed at 209.95 BRL (40.77 USD), 2.5% up compared to that on May 31.
EXPORTS – In May, Brazil exported 155.136 thousand tons of in natura beef, 33.4% more than that shipped in April and 28.2% up compared to that from May 2019, according to data from Secex. That is also a record volume for a month of May in all Secex series. From January to May, Brazil exported 625 thousand tons of beef, the highest amount ever exported in that period and 10.2% higher than that in the first four months of 2019.
The high volume exported and the strong dollar resulted in a record revenue in Real. In May, Brazilian slaughterhouses received 3.85 billion BRL, 41.8% higher than that received in April and more than two-fold that received in May 2019 (1.875 billion BRL).
The firm Chinese demand for animal protein may be linked to the fact that China has already overcome the worst period of the coronavirus pandemic, the suspension of beef imports from Australian slaughterhouses in May and the frequent cases of African swine fever (ASF) in the country.
HOG – The payment of workers’ wages and the emergency aid provided by the federal government added to the gradual resume of economic activities in some Brazilian regions increased pork meat sales in the first fortnight June in many of the areas surveyed by Cepea. As meat sales increased slightly, the demand from slaughterhouses for new animal batches increased too, pushing up quotes for all products in that period.
Between March 31 and June 15, the price of the special pork carcass traded in the wholesale market of the Greater São Paulo rose by 3.5%, closing at 7.14 BRL per kilo on June 15.
For live hog, the sharpest price rise was observed in Minas Gerais, where market conditions were more favorable to sales.
EXPORTS – The Brazilian exports of in natura pork meat hit, in May, the highest volume in all Secex series, which started in 1997. Last month, Brazil shipped 90.7 thousand tons of the product, 44.1% more than that exported in April and 53.2% higher than that in May 2019. According to Cepea collaborators, Brazilian pork exports continued boosted by the firm Chinese demand.
The higher volume exported in May and the strong dollar resulted in an also record revenue, higher than 1 billion BRL for the first time ever. Thus, Brazilian pork exports (in natura) generated 1.2 billion BRL in May, 50.7% more than that received in April and more than two-fold that from May 2019.
African swine fever outbreaks in several countries from Asia, Europe and Africa have been favoring Brazilian meat sales in the international market. According to the last report from the World Organization for Animal Health (OIE), there have been 7.1 thousand cases of ASF in 23 countries, primarily in Europe and Asia. Romania is the country with the highest number of cases (3.5 thousand), but Asian countries have lost the highest number of animals.
POULTRY – The reduction in the purchase power of the population in Brazil, due to the economic effects of the coronavirus pandemic, favored chicken meat sales in the first fortnight of June. Besides, agents from the Brazilian poultry sector reported that the payment of workers’ wages and the gradual resume of some economic activities in that period boosted chicken meat sales.
In this scenario, chicken meat prices rose more sharply than that for beef and pork meat, reducing its competitiveness against these two competitors.
EXPORTS – The Brazilian exports of chicken meat were high in May, having reached the highest volume shipped since July 2018. Exports were boosted by the firm demand from China, which has been high for months.
According to data from Secex, Brazil shipped 372.5 thousand tons of chicken meat (in natura) in May, 16.1% more than that exported in the previous month and 4.3% more than that from May/2019. With the higher volume exported and the strong dollar, the revenue received in Real rose sharply, hitting a new record, of 2.82 billion BRL.
Cases of the Bird Flu in the international market have been favoring the Brazilian exports of chicken meat. According to the last report from the World Organization for Animal Health (OIE), released on May 28, 186 new cases have been spotted in countries from Asia, Europe, Africa and North America. Still according to OIE, from March 27 to May 28, 1.95 million birds were killed by the disease.
Despite the higher volume exported and the revenue received, the average price paid for the Brazilian chicken meat exported has been dropping since early 2019. From January to May 2020, the average price in dollar decreased by 17.1%, to 1.34 USD per kilo, the lowest in more than 10 years. According to Cepea collaborators, China is pressing down the prices paid for the Brazilian meat.