June 9, 2011

Brazilian meat prices to increase in Q3

Although the beginning of the bovine off-season in Brazil has reach a relatively feeble market in short-term comparisons, the lower volume will lead to increment in stock prices in the coming months, especially in the third quarter.

Over May, the low volumes shipped decreased in contrast to April by 18%, 9.6% and 24% in cattle, poultry, and pigs, respectively more than offset the relative decline in slaughtering, thus, boosting the domestic availability.

With that, prices retracted by 3.4%, 3.6% and 9% respectively in the month compared to April. It is worth noting that in spite of this decline, prices are at levels above those recorded in May 2010, up 25% in beef and 15.2% in chicken. The exception is pork, whose prices retracted by 17.2% in YoY terms.

The price scenario partially draws upon the possibility of some recovery in the export volumes, plus the beginning of the cattle off-season. Moreover, the possible reopening of the Russian market and initial negotiations with Asian countries, as well as the estimated recovery of the global economy, explain the relatively optimistic framework for shipments in the industry.