Chicken, pork exports the brightest news in Brazil ag

The latest monthly review by the Brazilian Animal Protein Association (ABPA) is full of gloom, lightened only by some good news on exports.

Photominer, Bigstock
Photominer, Bigstock

The latest monthly review by the Brazilian Animal Protein Association (ABPA) is full of gloom, lightened only by some good news on exports.

Industries in crisis?

According to the ABPA, almost all its sectors have been in crisis in the first half of 2016. In a vicious circle, economic crisis led to a slow-down in business, factory closures, rising unemployment and a further deterioration in the economy.

Furthermore, corn prices have been high – eased only slightly by the second corn crop – and a lowering in the value of the real (BRL) has put further pressure on margins.

ABPA describes the situation as a “perfect storm.”

A new review by the group, based on the intentions of its members, points to a decline in production of both chicken and pig meat for the year. The number of chicks being placed is down, leading ABPA to forecast 2016 production at 13.0 million metric tons (mmt), 4 percent lower than the estimate at the start of the year. For the pig sector, output is now expected to be 3.1 percent lower than the earlier estimate at 3.64 mmt.

Continued growth in exports forecast

ABPA points to an expected growth in exports as a high point in its sphere of activity.

For chicken, the volume looks likely to be 8 percent higher than last year, buoyed up by the strength of sales to No. 1 market, China, as well as Japan, South Korea and the Middle East.

An increase of 28 percent is forecast in exports of pork compared with last year. Again, the Chinese market has been a success story, along with main destination, Russia. Argentina, Chile and Singapore also increased their purchases in the first half of 2016.

Good export performance in June

Chicken meat shipments from Brazil in June amounted to 411,900 metric tons, 4.1 percent more than the same month last year, reports ABPA. This contributed to a 13.9 percent increase in the volume shipped for the half-year to 2.266 mmt.

While the value of the trade was up 6.2 percent for June at BRL2.265 billion and by 21.7 percent for the half-year at BRL12.442 billion, values were lower than last year in foreign currency. Chicken exports for the 6 months of 2016 were valued at US$3.384 billion, 1.25 percent below the figure for last year.

Particular success in exports was achieved by Brazil’s pork sector – with volume increases of 29.5 percent for the month of June and 54.7 percent for the 6-month period compared with the corresponding periods of 2015. Figures were 61,322 metric tons and 353,300 metric tons, respectively.

Revenue from these pork shipments reached US$122.9 million for the month and US$633.8 million for January-June. Both figures were 14.8 percent above last year’s.

June was not a good month for exports of eggs, with exports down by 21.9 percent from 12 months previously at 528 metric tons. For the year so far, however, the volume is up 6.8 percent at 7,487 metric tons. In local currency, the trade for the month was down in value but it is up by 44.4 percent at BRL38.2 million for the half-year.

Inforeign exchange, the value of egg exports was up 8.8 percent for the January-June period at US$10 million although down 16.8 percent for June at US$798,000.

It has previously been reported that the costs of production for broiler and swine farmers in Brazil have shown a relentless upward trend in recent times.

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