March 22, 2013

Brazil's beef exports to the EU have begun strongly in 2012 as shipments rose by 106% on-year for the January - February period, at 10,998 tonnes.

The growth in shipments follows rising production in Brazil as cattle slaughter for the period rises by 8%. Weaker domestic demand for hindquarters throughout the period also contributed to an increase in availability of product bound for the EU.

Historically, Brazilians pay the majority of their taxes from January to March, leading to a decrease in disposable income and a trading decline in beef consumption, with forequarter sale increasing at the expense of hindquarters.

Frozen beef exports to the EU rose 121%, at 7,772 tonnes and chilled shipments increased 74%, to 3,148 tonnes. With weaker domestic demand of hindquarters cuts in Brazil and prices down 2% in February, exports to the EU helped to absorb the increase in production.

Although beef exports to the EU increased, Brazil has limited ability to supply the EU, as few cattle farms are eligible to supply the market. Since 2008, Brazilian farms have had to be accredited to supply the EU. In 2007, before traceability requirements took effect, EU imports of Brazilian beef totalled 182,000 tonnes. This figure fell to 42,000 tonnes in 2008, after the implementation of traceability requirements. In 2012, imports of Brazilian beef totalled 49,964 tonnes.