Porto Alegre, September 21, 2023 – Pork volumes exported by Brazil remain strong, with August reaching the second-highest number in history. August was a long month, with 23 business days, which helped but did not take away the shine of the result. However, the point that deserves attention and that could impact the dynamics of living in the interior of the country is the decline in the price per ton, which impacts the industries’ margin.
In August, Brazil exported 110.195 thousand tons of pork (combining fresh and industrialized), being the highest number of the year and in history, second only to the 114.195 thousand tons registered in August 2022. On the other hand, the average price per ton for the month was USD 2,272.72, the worst level since April 2022. In direct conversion, the price per ton was BRL 11,143.02 in August, the worst level since May 2022. Total revenue for the month was USD 250.443 mln. Some are the highlights in the month’s numbers, starting with China, whose volume and values paid decreased. China was one of the determinants of the decline in tons.
China’s contraction was already expected, considering that its pig farming is in crisis, suffering from excess supply throughout the chain and reduced consumption at the final end. There is also a slowdown in Chinese economic activity, which has led the government to release stimulus packages, such as reducing the country’s prime interest rate and injecting liquidity into the economy. Furthermore, the yuan, the country’s currency, is in a process of devaluation, hovering around 7.30 over the last few days, close to a graphic top. The weaker currency favors Chinese exports to the detriment of more expensive imports. This movement leads China to bargain prices on the world market, which is being reflected in the price per ton exported by Brazil, as can be seen in the attached graph.
This combination of factors is quite negative, and the outlook is that China will continue to import with little impetus toward pork on the global market. Even with this complicated scenario, Brazil still managed to export 30.055 thousand tons to the Chinese in August, which can be considered good, even though it is the lowest sent to this destination since May 2022. China remains the main destination for Brazilian pork exports. The average price paid per ton by the Chinese was USD 2,299.19. In December 2022, China paid USD 2,715.91, that is, since then the price paid has already fallen by 15.3%.
Another highlight of the month was the Philippines, with 14.728 thousand tons in August. It was the month in which Brazil managed to sell the largest volume of pork to this destination. The price paid by the Philippines is also falling, but above the Chinese level, at USD 2,438.02. It is worth noting that the country is still facing the consequences of African swine fever, counting on limited financial power to rebuild the local herd, suffering from a supply deficit. Another point that favors the expansion of Brazilian sales to the Philippines and other countries that until recently did not emerge as major destinations is price competitiveness and the search by Brazilian authorities to open new markets. Brazil has a large supply and low prices compared to the European Union, which is experiencing the opposite scenario, restricted supply and high prices, thus, the strengthening of Brazil’s business with various markets occurs smoothly.
The third-largest importer in August was Hong Kong, with 8.783 thousand tons, the fourth was Vietnam with 8.564 thousand tons, and the fifth place was Chile, with 8.368 thousand tons.
With the month’s result, between January-August/23, Brazil exported 789.949 thousand tons of pork, up 11.77% from the 706.763 thousand tons registered in the same period last year. Total export revenue hit USD 1.894 bln in the period, an increase of 19.63% over the USD 1.583 bln in the first eight months of 2022.
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