July 12, 2012

Brazil pig industry warns of crisis due to costly restrictions

Producers are repeatedly warned by Brazil's pig industry of a possible crisis, due to import restrictions and high costs.

Brazilian export figures reveal that Brazil shipped 43,913 tonnes of pork in June, worth US$108.4 million, which is a 16.7% drop in volume and 28.75% drop in revenue compared to June 2011. Volumes of pork shipped increased by only 0.72% (268,783 tonnes) between January and June 2012, and total revenues fell 6.5% to US$687.3 million.

Commenting on the figures, president of the Brazilian Association of Producers and Exporters of Pork (ABIPECS) Pedro de Camargo Neto said: "The export figures for June have once again frustrated the swine industry. An increase in foreign sales would certainly help to reduce the amplitude of the crisis."

Currently, Brazilian pork exports face restrictions in Russia, Argentina, South Africa and Albania. Russia, which was the primary destination for Brazilian pork, imposed restrictions after Russian health inspection services published negative reports about Brazilian abattoirs.

Russia's Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) is due to visit Brazil this month, but Camargo Neto said the visit had still not been confirmed. Sales of pork to Russia fell 52.87% in volume and 57.91% in revenues in June compared to the same period in 2011.

Exports to Russia have been diverted to Ukraine, which was the primary destination for Brazilian Pork in June, importing 11,938 tonnes. However, Camargo Neto said the price in Ukraine was significantly lower than the average price paid by Russia. "We're just keeping the volume at the expense of exporting firms," he said.

He added that Brazil's federal government had finally reached an agreement with Argentina, which saw a 71.19% drop in pork exports in June as the result of import restrictions introduced in February, which require importers to apply for licences before the product enters the country.

"We understand that the agreement provides trade volume for the second half of 2012, similar to the second half of 2011," he said. "We hope that the agreement actually becomes effective, helping the recovery of the industry."