December 16, 2019

Brazil's Marfrig says demand from China will keep beef prices high in 2020

However, the Brazilian meatpacker said prices next year won't be as high as current levels, reported Reuters.

Marco Spada, Marfrig Global Foods CFO said the arroba (15 kilogramme cattle, a common cattle price benchmark in Brazil) has hit 225 BRL (~US$53.62; 1 BRL = US$0.24) but may drop to 180-185 BRL (~US$43.81 – US$45.02) by 2020. The arroba was at 150 BRL (US$36.50) in August.

Spada said the slow dip in prices are due to a structural effect, referring to China's increasing per capita consumption from rising wages because of the African swine fever outbreak.

China has approved more overseas meat facilities for export to supplement dwindling pork supplies. The improved demand from China has increased prices for beef in Brazil, a political problem for a country that consumes plenty of meat.

Spada added that Brazil's beef exports would double if China increased its meat consumption by one kilogramme per capita.

Brazil President Jair Bolsonaro said he will not implement price controls on beef.

-  Reuters