January 26, 2012

Brazil's beef exports to record growth in 2012

Following 2011's slowdown, Brazil's beef exports are expected to recover with soaring prices and key markets' growth, and this will result in record sales revenues of US$6 billion, according to Brazil's main beef industry group.

Beef shipments from Brazil, one of the world's top exporters, fell 11% last year to 1.09 million tonnes, figures from the country's Beef Exporters Association (Abiec) show, due in part to restrictions imposed by No. 1 buyer-Russia.

However, expectations for a recovery in the Russian market, coupled with increased sales to the European Union and the United States, should help exports grow by 10% this year, the group said.

"We see the possibility of growth in volume, like in Russia, which can go back to past peak levels," said Abiec's president, Antonio Jorge Camardelli. Russia's entry into the World Trade Organization and talks aimed at getting Russia to lift partial restrictions on Brazilian beef were expected to help, he said.

Russia, which accounts for more than a fifth of Brazil's beef export market, suspended import licenses for beef, poultry and pork suppliers from three Brazilian states in June 2011, bewildering Brazilian officials who said there were no grounds for the action.

As a result, exports to Russia fell almost 20% in 2011 to 238,000 tonnes, with meats sold to it sourced from plants in other states. Meat-packing houses in the states of Mato Grosso, Parana and Rio Grande do Sul are still banned from selling to Russia after the June 2011 embargo.

Brazil's beef export income rose 11.7% last year to US$5.37 billion despite the drop in volumes sold, according to Abiec, which expects the figure to jump 20% in 2012.

Although shipments to the EU, Brazil's No.2 beef market, fell 10% in 2011 to 109,000 tonnes, revenue rose 21% with an increase in more expensive cuts being shipped, Camardelli said.

In volume terms, Brazil's beef exports reached a record 1.6 million tonnes in 2007 before EU requirements for increased traceability of its produce took a large chunk of that market away. The restrictions in Brazil are viewed as a protectionist move to keep out its price-competitive produce.