Brazilian pork production between hope and fear
Pig prices in Brazil have been on a rollercoaster again this year. In April/May, they were still fluctuating between €1.15 and just under €1.30 per kg BW; in early/mid-July, they plummeted to a low of €1.04/kg. In August, they fluctuated at just under € 1.50 per kg. A further downward trend towards below €1.45 per kg is now expected.
The fall in prices in the first half of the year is due to the decline in exports of over 10% compared to the previous year. A decisive factor here was Ukraine's import ban until the end of May. Although some of the goods were redirected to the Russian market, it was not possible to fully compensate for this. Sales to Hong Kong also increased by 28%.
The price stabilization in August is due to the reopening of the Ukrainian market, the stronger Brazilian currency REAL and the already increasing domestic demand for goods in stock for the Christmas holidays. Further hopes are pinned on Russia, which no longer allows US origins into the country due to ractopamine. The first-time approval for the Japanese market opens up further prospects, but only in the medium term.
Brazil produces around 3.3 million tons of pork and ranks 4th in the world after China (around 50 million tons), the EU (around 23 million tons) and the USA (around 10 million tons). Exports have stagnated at around 600,000 tons for several years. In comparison, pork exports from the USA amount to around 2.3 million tons, 2.1 million tons from the EU and around 1 million tons from Canada. Rising Brazilian production is almost fully absorbed by growing domestic consumption. However, consumption growth has recently slowed somewhat due to the weaker economic development. The willingness to invest in Brazil has become significantly weaker; this also applies to the pork industry. The World Cup in Brazil is still a long way off and there are still protests.
