November 22, 2019

 

Brazil cattle prices jump to record high thanks to demand from China

 

Wholesale beef prices are 13.9 BRL (US$3.31; 1 BRL = US$0.24) per kilogram in Sao Paulo, according to the University of Sao Paulo's Cepea Research centre, reported Reuters.

 

Abrafrigo, Brazil's meatpackers association said beef exports to China have increased 23.6% between January to October compared to same period in 2018, due to African swine fever (ASF) outbreak in China that has hurt the county's meat supplies.

 

On October 22, 2019, beef prices have shot up 36.4% to 14.69 BRL (~US$3.50) per kg. 

 

Andre Braz, economist, Getulio Vargas Foundation said as beef prices continue to go up, it will push prices up for other meats as well. Brazillians are set to receive their 13th  salary - an extra month's salary paid to employees at the end of the year – which is expected to increase meat demand even though prices are at an all-time-high.

 

China had recently authorised 24 more beef plants since the beginning of this year. Before that, only 16 facilities were approved.

 

Péricles Salazar, president of Abrafrigo said they did not expect demand for slaughtered cattle to be as high as it is now.

 

1.5 million tonnes of beef were exported by Brazil between January to October 2019, 11% higher compared to 2018. Exports to China totalled 320,000 tonnes, 23.6% higher compared to last year during the same period.

 

Brazil's weakened currency is also boosting exports.

 

Salazar said margins for meatpackers who did not obtain approval to export to China are lower as other destinations aren't offering high prices. He expects more meatpackers to be approved by China this year.

 

Braz expects prices to drop in February or March next year, as long as there is plenty of cattle supply and good weather for grazing pastures.

 

-      Reuters