Brazil’s pork exports will soar 20% next year, and beef shipments hit an all-time high, supercharged by Russia’s quest for supplies to replace those lost with a ban on imports from the likes of the European Union and the US.
Brazil’s beef exports will jump 10.1% to 2.24m tonnes, topping the record 2.19m tonnes set in 2007, and cementing the country’s place as the world’s top shipper, US Department of Agriculture staff in Brasilia said in their first forecasts for next year.
Pork shipments will soar 20% to an eight-year high of 696,000 tonnes.
The increases reflect the boost to trade fortunes from Moscow’s decision to ban for a year shipments from many Western powers in retaliation for sanctions imposed over claims of Russian forces stoking the Ukraine crisis.
JBS, the Brazilian meat giant, has already termed Moscow’s move “very beneficial” for its own export fortunes.
Russian importers have also turned to Argentina, Uruguay and even Swiss group Micarna in a search for fresh origins.
‘One of their best years’
Indeed, the quest by Russia for alternative suppliers, also evident in approval of more than 100 Brazilian meat plants for export, comes at an opportune time for the South American country, which is facing a soft domestic market.
Inflationary pressures, coupled with weak economic growth, will curtail growth in domestic beef consumption to 1.2%, and in pork demand to 1.8%, the bureau said.
However, the weakness in Brazil’s currency, the real, fostered by the economic malaise is underpinning export demand for producers which, enjoying low feed costs, have been raising output substantially.
“Cattle producers have used more feed and other ingredients during the dry season – normally between May and September when pasture conditions are poor – to maintain cattle weights,” the bureau said.
With growth in Brazil’s feedlot industry too, the country’s beef output will top 10m tonnes next year for the first time, although still a figure unlikely to surpass that of the US, the top producer.
Hog producers are already enjoying “one of their best years in terms of profitability due to lower costs of [feed] combined with an adjustable supply and demand of hogs, keeping pork prices at high levels throughout the year”.
Next year, Brazil’s hog sector boom is “likely to continue as international demand, mostly from the Russian Federation, will likely increase for Brazilian pork”.
Brazil’s pork exports “are forecast to rebound significantly in 2015, mostly due to projected higher exports to the Russian Federation, due to its politically motivated one-year import ban on the US and other countries,” the bureau said.
“Trade sources expect that Brazilian pork exports will occupy 35-40% of the Russian market” next year.
For beef, “Brazilian beef are optimistic about the new window of opportunity for higher exports to the Russian Federation in the next 12 months”.
Brazil is already the world’s top beef exporter, ahead of India and Australia, and shipping nearly twice as much as the US.
In pork exports, the country ranks fourth, behind the US and EU, which typically ship more than 2m tonnes a year, and Canada.