August 11, 2011

Brazil's July pork exports plunge 78%

Brazil's July pork exports to Russia fell 78% by bulk as compared with the same month in 2010, pulling Brazil's total pork exports for July down 18% on-year.

The drop is due mainly to an ongoing trade embargo by Russia that has cut off Brazil's main pork market, according to statistics released Monday (Aug 8) by the industry's producer and exporter association, known as Abipecs.

Revenue from pork product exports to Russia in July totaled US$3.98 million, down from US$19.4 million in sales to the country in July 2010. Russia is the main export market for Brazilian pork, responsible for 43% of total sales by Brazilian producers. The Russian government has restricted sales of pork, beef and poultry from between 89 and 126 Brazilian processors since June 15.

Considering all countries, Brazil's July total pork exports were down 18% by volume in July (36,104 tonnes, from 43,771 a year prior), and dropped 13% in revenue (US$93.8 million, compared to US$108.2 million in July 2010). The median sales price for Brazilian pork actually rose during the month by 5.14%, to US$2,600 per tonne.

"We remain hopeful for a rapid solution to the trade embargo, because we think it's more a matter of disagreement between bureaucratic and health authorities over a technical issue of health," said Abipecs President Pedro de Camargo Neto in a press statement. "The Ministry of Agriculture should place a priority on this issue, and expedite a solution."

For the 2011 year through July, total revenues and prices for pork exports are rising compared to last year, due in part to growth in secondary markets. Total sales revenue for the year is up nearly 8% compared to this time in 2010, to US$829.12 million through July this year from US$769.5 million last year. The average price is 11.5% higher per tonne this year.

Through the first seven months of this year, total export volume to Russia is down 21% from last year. But Brazil's No. 2 pork export market, Hong Kong, has imported about 13% more by volume so far this year compared to the year prior.

"But it will remain very difficult in the short term to maintain export volumes without an end to the (Russian) trade embargo," Camargo Neto said.