The price of beef (fresh, chilled or frozen) exported by Brazil mainly to China in the first week of February maintained the downward trend of the last eight months, but, according to analysts, the trend now is for prices to recover in the rest of the year, although to levels lower than those observed in June.
According to data from the Foreign Trade Secretariat (Secex), the ton was sold for US$ 4,822.90, on average, at the beginning of this month, with retreats of 0.4% in relation to the average of January and of almost 14% in the comparison with February 2022. Last June, the protein was exported for US$ 6,826.30 a ton.
The Brazilian Association of Frigorificos (Abrafrigo) recently expressed concern about the drop in prices of exported meat, not least because the margins of slaughterhouses in the domestic market are still tight thanks to retracted demand. The entity stated that the renegotiation of contracts with customers in China, the main destination for shipments, was the greatest pressure factor.
“The anticipation of purchases for the Chinese New Year made the renegotiation movement possible”, agrees Thiago Bernardino, a researcher at the Center for Advanced Studies in Applied Economics (Cepea), at Esalq/USP. “But we must remember that the [external] demand this year will be interesting – and that is already designed, mainly because the exchange rate will remain high.”
Fernando Iglesias, an analyst at Safras & Mercado, emphasizes that the prices recorded in the February trade balance do not reflect sales in the month. “These are deals closed 30 or 45 days ago. Over the past few days, what we’ve heard from reports is that China’s post-holiday rebound has seen a recovery of up to US$ 500 off previously seen prices.”
According to Bernardino, from Cepea, China should continue buying meat from Brazil, unless some inflationary pressure forces it to purchase more beef from India or cheaper proteins, such as buffalo meat. “On the global stage, the competitive advantage belongs to Brazil and the US”, he points out.
Recently, the US Department of Agriculture (USDA) revised its estimates for beef imports into China. The agency estimates a growth of 2.2% in the country’s demand, to 3.5 million tons, claiming that it is “unlikely” that Chinese pork production is sufficient to meet protein consumption.
The opening of high value-added markets – South Korea and Japan are on the agenda of the government and the private sector – can help sustain prices. “But the producer cannot lose sight of the fact that it is not known when this will be operational and what the volume will be”, says Bernardino.
Regarding the domestic market, Bernardino says that the trend is for a slight increase in per capita consumption this year – around 400 grams, to 25.9 kilos. “This improvement should be felt mainly after the first five months of the year, when Brazilians generally have higher expenses”, says the researcher.
In the current external and domestic scenario, the fat cattle arroba was traded at R$ 292.09 in São Paulo on average during February, above the R$ 285.97 in January but well below the average of R$ 340 on February 30, 2022.
Iglesias points out that the exchange rate at R$5.50 and the high prices of meat abroad allowed an arroba of R$350 last year. “But now the situation is very different. Meatpacking plants in Tocantins report that they are not buying fat cows, only brand new ones and beef, such is the offer”.
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