February 12, 2010

JBS and Marfrig gain on higher beef export volumes

Brazil's biggest beef producers, JBS SA and Marfrig Alimentos SA, rose to the highest in a week in Sao Paulo trading on a report export volumes and prices climbed in January, boosting the their profit outlook.

JBS added 2.5% to BRL9.28, the highest level since February 3, while Marfrig added 1.1% to BRL22.18.

Beef exports were boosted by good demand in Russia, the Latin American country's biggest export market, according to analysts.

Analysts noted that volumes and prices have been steadily recovering since late 2009, and in January 2010 the recovery trend continued. Volumes expanded 7% from the year-earlier period as prices jumped 15%.

Meanwhile, BRF Brasil Foods SA, Latin America's biggest poultry processor, fell 0.4% to BRL45, as poultry volumes decreased 15%, more than offsetting a 13% price increase during the month, analysts said.

On the other hand, the Russian ban on US chicken may cause the world's largest economy to redirect exports to other markets. Russia, the world's biggest poultry importer, is also increasing poultry production with the goal of self-sufficiency, which may further pressure prices.