Average Beef Export Price in Brazil Drops to Six-Month Low Amid Record Export Value and Volume

According to Brazil's Ministry of Economy data (fresh and frozen beef exports), the Brazilian beef average export price fell to its lowest level since March 2022, at $6.00/kg.

In September, prices fell MoM for the third consecutive month, down 2.1%. In annual terms, prices were still up by 4%, but it's worth noting this was the slowest YoY difference since February 2021.

Export prices are mirroring domestic prices, which have also fallen to multi-month lows in October due to lower domestic demand (as consumers substitute beef for cheaper meats due to inflation) and higher supply compared to last year. In H1 2022, bovine slaughter in Brazil was 14.36 million head or 3.78 million mt. In terms of mt, it was the largest number for the first half of the year since 2019.

Nonetheless, Brazilian beef exports posted their second-best value in a month on record, at $1.22 billion, up 12.5% YoY. Export volume was also the second best in a month, at 203 thousand mt, up by 8.5% YoY.

The Brazilian real weakened after April 2022, which can partially explain new records in export volume during August and September

After touching its strongest level in eight months during April 2022, the Brazilian real started to weaken against the US dollar during the following months.

A weaker real is supportive of exports, as it makes them cheaper for importers and incentivizes producers to export instead of allocating more products to the domestic market.

This weaker real in previous months could reflect the near record high level posted in September (as some contracts are pacted months earlier).

Following the same logic, the Brazilian real’s 15-month low during July should reflect higher exports in October.

Source: Tridge, Brazilian Ministry of Economy and IMF

Including processed beef, exports reached a new record in September, driven by China

ABRAFRIGO (Brazil Association of Meat Processors) reported that total beef exports, including processed beef, reached a new record in September, at 231 thousand mt, up 6% YoY. In terms of value, exports were $1.32 billion, up 10.5% YoY.

Exports to China were 138 thousand mt, representing a 59.5% share of Brazilian exports during the period. China upped its demand for Brazilian beef just before the Golden Week holiday in early October and also secured supplies for the Chinese New Year, set to occur in late January 2023.

From January through September 2022, China imported 924 thousand mt, worth $6.19 billion, of Brazilian beef. China is followed by the US, which has imported 129 thousand mt worth $731 million, and Egypt, which has imported 88 thousand mt worth $335 million.