Contact

Photo of Brazilian pork exports start 2018 lower

Bethan Wilkins

Analyst

AHDB Pork Market Intelligence

email

Email Bethan

T: work 024 7647 8757

Brazilian pork exports start 2018 lower

Home \ Prices & Stats \ News \ 2018 \ May \ Brazilian pork exports start 2018 lower

During the first quarter of 2018, Brazil exported 16% less fresh/frozen pork than in the same period last year. This reflects the ongoing Russian ban on Brazilian pork imports, which previously accounted for over 40% of Brazil’s pork export volumes.

However, the overall decline was minimised by strong growth in shipments to China and Hong Kong. At 70,400 tonnes (+ 80% year-on-year), pork exports to these destinations accounted for over half of the overall traded volume during the quarter. This is twice the market share of the previous year.

Export growth to these markets may be expected to continue supporting Brazilian pork exports in the coming months, especially given the ongoing trade dispute between China and the US. If the 25% import tariff on US pork remains in place, there is scope for other suppliers to increase their market share. However, competing on the Chinese market may still prove difficult, as Chinese domestic pork prices are currently very low, and EU pork will also be aiming to maintain or grow market share.

Overall, export growth to alternative destinations is expected to be unable to fully compensate for the loss of the Russian market throughout 2018. As such, the latest USDA forecasts anticipate Brazilian pork exports to be back 20% on 2017 levels this year.

undefined

With these challenges in mind, Brazilian pork production is now expected to moderate somewhat this year. Pig prices in Brazil are currently over 20% lower than year earlier levels, reflecting higher supplies on the domestic market due to the loss of Russian exports. While improved economic conditions may boost consumer demand, and absorb some of the additional domestic supplies, prices are likely to remain at a lower level. This, coupled to higher feed costs, means Brazilian producers are seeming to face a challenging year ahead.

undefined

Bethan Wilkins, Analyst

bethan.wilkins@ahdb.org.uk, 024 7647 8757