With firm demand, China looks for more suppliers in Brazil

Cepea, March 18, 2024

CATTLE – China has allowed more meatpackers to export beef and meat of both chicken and pork, which recognizes the quality and the professionalism of the Brazilian sector.

This highlights that China wants more Brazilian meat. In order for Brazil to meet that, companies will need more animals. Cattle farmers tend to increase the number of animals in their herd allocated to this market due to the possible demand increase and special prices.

In the mid or long-term, both productivity and quality tends to increase. Some agents may receive more at first, but what was a differential soon becomes standard.

The demand for “China cattle” is likely to increase in a few weeks, even in areas where this segment was not observed due to lack of allowed meatpackers. Producers respond fast to price rises and they may start and intensify investments in order to obtain animals up to 30-months-old to slaughter. It is worth noting that the demand may be concentrated in China, condition that generates a risk of dependency.

SWINE – Price averages for live pigs have been decreasing slightly in the partial of March. As for inputs used in the swine production, Cepea data indicate slight rises for corn values and significant decreases for soybean meal quotations. As a result, the purchase power of swine farmers in São Paulo has been decreasing against corn, but moving up in relation to the soybean byproduct.

In the SP-5 region (Bragança Paulista, Campinas, Piracicaba, São Paulo and Sorocaba), the average price for live hogs was at BRL 6.71/kg in the partial of March (up to March 12), downing 0.3% compared to February. In spite of recent increases, the low demand from the industry in this early March has been pressing down the monthly price average.

POULTRY – Price averages for chilled chicken meat and for major competitors, special pork carcass and beef carcass, traded in the wholesale market of the Greater São Paulo, have been moving down in March compared to February. However, price drops are more significant for competing meats, scenario that reduces the competitiveness of chicken meat against pork and beef.

It is worth noting that chicken meat values were in an upward trend since mid-January, but have started to drop in the second fortnight of February, pressed down by the weak demand.

(Cepea-Brazil)