Challenges ahead for Brazilian pork industry
Over the past 10 years or so, Brazil has increased its pork production from around 3 million tonnes per annum (cwe) to over 3.75 million tonnes in 2017. The lion’s share of production is consumed domestically, and up until 2015 around 400-500 thousand tonnes of fresh/frozen pork was exported annually. This increased to 629 thousand tonnes in 2016 and was 593 thousand tonnes in 2017.
In 2017, Russia was once again Brazil’s largest pork market, taking 43% of Brazilian pork exports. Since 2012 Russia’s share of the Brazilian export market has grown from 25%, partly due to Russia’s widely reported ban of pork from many other countries. Interestingly, since 2012, China’s share of Brazilian pork exports has increased from 1% in 2012 to 8% in 2017, peaking at 14% in 2016. This has led to China jumping up to become Brazil’s third largest export market for pork.
With Russia, and to an extent China, dominating Brazilian pork exports, there may be some uncertainty surrounding Brazilian pork trade in the longer term. Both of these countries have ambitions to grow their own domestic pork production over the next few years, which is likely to reduce overall requirements for imported product.
Furthermore, Brazil’s exports to other countries have recorded only slight changes over the last 10 years, and entering new markets has proved somewhat difficult. Therefore, domestic demand will likely need to pick up, if exports do slow. The economy in Brazil is forecast to grow again, which is positive, but higher interest rates could make it harder to attract investment in the sector, and poultry is becoming more ingrained all the time. So with both supply and demand growth uncertain, it will be an interesting balancing act for the sector to perform.
Duncan Wyatt, Lead Analyst
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