MercoPress. South Atlantic News Agency

Beef prices to remain high in 2020 because of China, forecasts meatpacker Marfrig Global Foods

The price of the arroba, a 15-kilo unit of weight has reached 225 reais (US$53.62) but could fall to 180-185 reais next year, said Marfrig CFO Marco Spada

The price of beef in Brazil will remain high in 2020 but not at current levels, an executive for meatpacker Marfrig Global Foods said on Friday, citing high demand from China and other Asian countries.

The price of the arroba, a 15-kilo unit of weight that is a commonly used as a benchmark for cattle prices in Brazil, has reached 225 reais (US$53.62) but could fall to 180-185 reais next year, said Marfrig CFO Marco Spada. In August, he said, the arroba was at 150 reais.

“We have reached a new price level, with some room for a drop, though prices should remain high,” Spada said at an event marking the official launch of Marfrig’s new vegetarian burger.

“This is a structural effect, the per capita consumption in China was already increasing due to rising wages and it accelerated after the African swine fever epidemic,” Spada said.

The epidemic has decimated China’s protein stocks, forcing the country to rely more on imports. Increased demand from China has also lifted prices of beef domestically in Brazil, creating a political headache in a country known for its high meat consumption.

On Thursday, President Jair Bolsonaro reiterated he would not force price-controls on beef to keep local prices down.

Demand from China is a boon to Brazil’s meatpackers. Spada said that if China increases its meat consumption by 1 kg per capita, that would double Brazil’s beef exports.