On-the-Ground Updates

Solid global demand for Brazilian animal proteins should continue

Fresh Whole Beef
Francielle Rozzatti
Published Sep 3, 2020
The trend of solid global demand for Brazilian animal proteins should continue, despite the prospect of falling prices for some products, evaluates Bank of America (Bofa). In a report published on Wednesday, analysts say that the country's meat exports maintained “an impressive trajectory in August”, with a 43% increase in beef shipments, 25% in chicken meat exports and an increase of 120% in the external trade of pork, according to data released yesterday by the Foreign Trade Secretariat (Secex) of the Ministry of Economy.

The bank points out that, despite the advance in shipments abroad, beef prices in dollars continue to fall. This may reflect the difficulties in negotiating with China, which has been suspending imports of some Brazilian plants. However, this drop was offset by the appreciation of the dollar against the real, which also helped to minimize the effects of the 4% increase in beef prices. The prospects of Bofa's analysts point to a continuation in the retraction of beef cattle prices in the fourth quarter of this year, which may help to recover the margins of companies in the sector. "Therefore, we still see Brazil as a leading exporter in a fierce global beef market," says the statement.

Regarding chicken meat, Bofa sees a recovery in volumes shipped to the foreign market, with stable prices. This indicates an opportune time for producers who are being pressured by rising feed costs due to high corn prices, analysts say. They also added that the news must be good especially for BRF, which has a strong production of the protein.

Finally, the report comments that the international demand for Brazilian pork continues to skyrocket, reaching a record in August. "Unlike last month, prices rose by 5% in dollars in the annual comparison, which indicates that the volumes sent to China are still strong since African swine fever still plays an important role in the availability of pork in the country", evaluate Bofa analysts.
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