Cepea, November 19, 2019 – In the first fortnight of November, the price of the beef traded in the wholesale market of the Greater São Paulo (beef carcass, composed by 48% hindquarter, 38% forequarter and 14% thin flank) hit a real record in the series of Cepea, which started in 2001. On Nov. 14, the average cash price paid for the product was 13.42 BRL/kg, 9.3% higher than the previous record, observed in April 2015, at 12.28 BRL/kg – values were deflated by the IGP-DI from October 2019. This scenario was linked to the firm domestic and international demands as well as the low supply of animals ready to be slaughtered.
For fed cattle arroba, prices hit a new real record too. On November 14, the ESALQ/B3 Index for fed cattle closed at 199.25 BRL (47.55 USD), a staggering 16.7% up in the month – the previous real record, at 191.89 BRL, was registered in April 2015.
In Brazil, beef sales usually increase at this time of the year, when wholesalers make inventories, expecting the demand for meat to increase, due to barbecues and the holiday season. Concerning exports, Brazilian shipments have been higher than 100 thousand tons since July 2018, primarily due to the demand from China – in the first half of November, new Brazilian slaughter facilities were certified to export beef to the Asian country.
It is worth to mention that, in October, Brazil exported 160.09 thousand tons of in natura beef, a record – until then, the record had been registered in Sept/18, at 150.66 thousand tons, according to data from Secex. The volume exported in October was 29.4% higher than that from Sept/19 and 17.77% up compared to that from Oct/18. Between January and October, shipments totaled 1.218 million tons, 11.14% more than that in the same period last year and a record.
With the strong US dollar (the average in October was 4.08 BRL), the revenue received from exports last month hit a record too, at almost 3 billion BRL, 35% higher than that from Sept/19 and 46.64% up compared to that from Oct/18 (Secex).
Animal supply is low in all the Brazilian regions surveyed by Cepea. In general, the growing number of females slaughtered in recent years reduced animal availability. Thus, Brazilian cattle farming needs to increase productivity in order to meet the growing demand for animals for slaughter, since female slaughter hit record volumes in the first months of 2019.
COMING WEEKS – It is observed that, along the first semester, hindquarter prices drop, while forequarter quotes rise, according to data from Cepea. In the second semester, however, the scenario is the opposite, with growing hindquarter prices and fading forequarter quotes. Thus, as the share of hindquarter in the beef carcass is higher than that for forequarter, beef carcass quotes tend to continue firm in the coming weeks, reaching new record levels. Besides, beef exports should continue at a fast pace, lowering availability in the domestic market and pushing up prices.
HOG – Live pig prices increased in the Brazilian market in the first fortnight of November. The fast exports pace for pork meat linked to higher demand in the domestic market led large-sized slaughterhouses to search for new batches of pig ready for slaughter, mainly in the independent market.
The sharpest price rise, at 3.6%, was registered in Arapoti (PR), to the average of 5.30 BRL/kg on Nov. 14. In the SP-5 region (Bragança Paulista, Campinas, Piracicaba, São Paulo and Sorocaba), the price for animals delivered at slaughterhouses averaged 5.38 BRL/kg, 1% up between October 31 and November 14.
EXPORTS – The Brazilian exports of pork meat increased sharply in October, reaching the third highest volume in all Secex series, which started in 1997. Revenue in Real, in turn, was a record. According to Secex, Brazil shipped 67.3 thousand tons of swine products last month, receiving for that 607.63 million BRL.
The amount shipped in October was 17.8% higher than that from September and 8.6% higher than that from Oct/18. Revenue in Real rose 19.4% in the monthly comparison and 51% in the annual comparison (Secex).
The record revenue is linked to the price paid for the ton and the strong US dollar. In October, the average price for pork exports was 2.21 USD per kilo, the highest since 2019 and 28% up compared to the average in October/18. The US dollar, in turn, averaged 4.08 BRL in the month, a slight 0.9% down compared to that from September, but still one of the highest levels in 2019 and 8.6% up compared to that from Oct/18.
China is still the number one destination for the Brazilian pork meat. In October, Brazil shipped 26.5 thousand tons of the product to China, 39.3% of the total exported in the month and 14.7% more than the amount shipped in September – this increase was the sharpest among all importing countries.
POULTRY – The beginning of the month and the national holiday on November 15 led purchasers to anticipate broiler meat acquisitions, increasing liquidity in the Brazilian market and pushing up quotes in the first half of the month. According to Cepea collaborators, besides the demand increase, high price levels for beef and pork meat also favored valuations in the poultry market.
In the wholesale market of chicken cuts and giblets from the Greater São Paulo, prices for all the products surveyed by Cepea increased in the first half of the month. Between Oct. 31 and Nov. 14, quotes for frozen chicken heart had the sharpest rise: 14.5%, averaging 12.57 BRL/kg on Nov. 14, the highest daily average, in nominal terms, in all Cepea series, which started in April 2004 for this product.
For frozen chicken fillet, prices were on the rise – after having dropped sharply in October –, averaging 7.81 BRL/kg on Nov. 14, 2% up in the same comparison.
Between October 31 and November 14, quotes for the entire frozen chicken rose 8.1% in the wholesale market of São Paulo State, averaging 4.69 BRL/kg on Nov. 14. For the chilled product, prices increased 11%, in the same period and region, averaging 4.81 BRL/kg.
EXPORTS – Brazilian exports of broiler meat increased in October, surpassing the amount shipped in September. According to a report from Secex, Brazil exported 334.1 thousand tons of the product last month (in natura and processed), 3.4% up compared to that from September, but 8.8% down compared to that in October 2018.
This increase between September and October is linked to the higher number of working days in October, since the daily average of shipments during the month was the second lowest in the year, only after that from January. Thus, some agents from the sector reported that exports were lower than the expected.