August 11, 2011

Brazil's beef exports drop 19% in July

Brazilian beef exports in July declined 19% against June, to 62,767 tonnes swt, due to higher beef prices, tight supplies, a rising currency and a weaker Russian and Middle Eastern markets.

During July, cattle prices in Brazil strengthened, and are expected to continue to rise through to a seasonal peak in October (after reaching a yearly low in June). The higher prices, combined with a strong currency, continue to constrain Brazil's competitiveness in the global scene.

However, low demand from the Russian market during July contributed to a 34% monthly fall in Brazilian shipments, to 18,027 tonnes swt. Reportedly, the Russian market has been impacted by high stocks, along with sluggish consumer demand. Similarly, Uruguayan beef exports to Russia for July dropped 32% on the previous month, to 3,811 tonnes swt, while Australian shipments fell 21%, to 4,039 tonnes swt.

Russian demand is expected to increase during coming months, as stocks decrease and importers rush to use the remaining quota allocations (around 50-55% of the total) before November.

Brazilian beef exports to the Middle East or July decreased 28% on the previous month, to 25,647 tonnes swt, as the high currency, increased prices and unstable political situation impacted shipments.