Pork production costs rise in Brazil, export value falls

In October, exports of Brazilian pig meat (all products, fresh and processed) continued the year’s upward trend in volume so the total for the year to date reached 444,900 tons – 5.3 percent more than the same point in 2014. According to the Brazilian Association of Animal Protein (ABPA), however, revenue was down by 21 percent at US$1.065 billion. For the month of October, the volume of pork exported was down just marginally at 51,500 tons but its value in foreign currency was 41 percent lower at US$117.1 million.
“With the pork prices in 2014, combined with problems in the international market resulting from the political crisis in Eastern Europe, we were able to achieve record revenue last year,” said Francisco Turra, chief executive of ABPA. “This year, the international flow has adjusted and the market stabilized so normal price levels have returned, leading to the drop in revenue from exports.”
Russia was the main destination for Brazilian pork in October, accounting for 42 percent of the total, and 10 percent more than in the same month of 2014. For the year to date, shipments to the Russian market are up 30 percent on last year at 200,000 tons. October exports to the next most important markets for Brazilian pork - Hong Kong and Venezuela – were up by 13 percent and 113 percent, respectively, from the same month in 2014.
Following a meeting with Brazilian agriculture minister, Katia Abreu, the Chinese Ministry of Quality Management, Supervision, Inspection and Quarantine (AQSIQ) announced it had authorized 7 new slaughterhouses in Brazil to export meat to China, including 2 for pigs. The expectation is that each establishment will export products valued at between US$18 million and US$20 million per year, according to Brazil’s agriculture ministry.
This positive development in export prospects may come as some relief to Brazilian pig producers, who experienced an average 5.2 percent increase in cost of production in October compared to the previous month. The rise brings the national ICPSwine/Embrapa index to 205.1 points compared with the baseline of 100 in January 2005. The index has risen 16.4 percent since the start of 2015.