Brazil pork exports rise on lower prices

Brazilian unprocessed pork exports during the first 10 months of 2009 increased 7 percent year-on-year, to 449,217 tonnes swt. However, volumes were still 11-percent lower compared with record 501,934 tonnes swt in 2005.

Despite the higher volumes, the profitability of the industry has been severely affected this year, as average FOB prices have decreased 30 percent over the same period in US dollar terms to US$2,066 per tonne, and the Brazilian reais has been recovering rapidly.

Average prices have failed to recover during the year, increasing only 3 percent from January to October to US$2,150, and 36-percent down from last year's September peak of US$3,361 per tonne.

Meanwhile, the industry is becoming less competitive, as the Brazilian reais has appreciated 33 percent against the US dollar during the year.

Local analysts forecast an ongoing rise, unless more drastic measures are taken by the government - as the 2 percent tax on foreign financial investments has had a minimal effect in counteracting the local currency's appreciation.

The Brazilian Pork Exporters Association will focus in opening new markets during 2010, particularly high value destinations, to overcome low values in Brazil's main markets – CIS, South-East Asia, South America and Africa.

US$1 = BRL1.735 (Nov 13)