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Beef Price Record at São Paulo Wholesale Market

06 May 2015

BRAZIL - After calf and fed cattle, now beef prices have set a record in the Brazilian market.

Beef carcases saw an average price of 9.81 BRL per kilo (3.26 dollars/kilo) in the wholesale market of Greater São Paulo, the highest real value (deflated the IGP-DI - Brazil’s general price index - from Feb./15) of the whole Cepea series since 2001.

The increases, as they were for calves and fed cattle, are due to the low animal supply.

At the same time, the wholesale demand has been increasing since beginning of April and exports have also put on the pressure.

The low supply of animals for slaughter is changing the payment methods in the Brazilian cattle market.

In an attempt to attract sellers and sustain the slaughter scale, slaughterhouses are offering short-runs, cash, or even payments before the slaughter day.

Despite these moves supply remains lower than the demand.

The advanced payment has been constantly passed on to Cepea, especially by industries, who usually trade in cash.

Prices rose in thefirst fortnight of April, at a time when they were already higher than the record-high in April 2008.

The ESALQ/BM&FBovespa fed cattle Index (São Paulo state) increased by 1.30 per cnet in the first part off April, closing at 149.53 BRL (49.19 dollars) on 15 April.

For poultry, prices weakened and supply has been higher than the demand.

According to data released by the Brazilian Association of Chick Producers (Apinco), the number of chicken on farms has been rising since June 2014. In January this year the increase was 2.8 per cent compared to the same period last year, with a total of 539.8 million birds.

Consequently, industries are trying to sell the production in the external market. Exports have warmed up, and are favoured by the value of the dollar and the bird flu out break in the United States – Brazil’s main market for poultry meat.

In March, Brazil exported more than 300,000 tonnes of fresh poultry meat, hitting 316,970 tonnes, an increase of 18.4 per cent compared to regarding February and 7.4 per cent compared to March last year.

As for pigs, falls in hog prices, started in mid-March. The drop is leading to a reduction in the purchasing power of pig farmers for feed, compared to the same period in April last year.

Historically, in the Brazilian market, pig prices fall back during the first months of the year because of a cooled demand, but this year, the scene is worse.

Pig meat exports also remain lower than last year. According to Secex, from January to the first half of April 88,900 tonnes of fresh meat were shipped.

In the pork meat market prices are also falling because of the lower sales both inside and outside Brazil. In order to avoid rising stocks, the sector has been trading at lower prices.

TheMeatSite News Desk

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