September 24, 2013
Brazil''s hog prices rise due to low volume
Affected mainly by the low volume of slaughter-ready animals, Brazil''s hog quotes resumed increasing in the first two weeks of September.
In the south-eastern region of Brazil, this trend has been verified more significantly, where independent producers are more common to find.
Hogprice rises, in turn, have been transferred with less intensity to the wholesale market of the Greater São Paulo. According to Comprehensive Economic Partnership for East Asia (CEPEA) information, slaughterhouses say that they face difficulties to sell pork at higher quotes to end consumers.
Due to the slight increase of the hog volume available in the market, the upward trend that was observed during August weakened at the end of that month.
Also in September, fed cattle and meat quotes have been registering significant increases, affected mainly by the limited supply compared to the demand. The ESALQ/BM&FBovespa Index (São Paulo market) closed at BRL106.78 (US$48.50) on September 16, the highest nominal level since November 24, 2010, when the average was BRL107.92 (US$49).
In regard of the beef carcass, the average on September 16 in the wholesale market of the Greater São Paulo was BRL6.93 (US$3.15) per kilogramme, the highest price level since November 21, 2011, at BRL6.97 (US$3.17) per kilogramme.
In general terms, the fed cattle supply was reduced in almost all regions surveyed by CEPEA in early September, except in Rio Grande do Sul State, where producers were using pastures to plant other crops. In this period, the volume available in the Brazilian market refers mainly to feedlots.
In September 16, the São Paulo market averaged BRL105.48 (US$48), 4.3% more than August 2013 at BRL101.11 (US$46) and 9.7% above that in the first fortnight of September 2012 at BRL96.16 (US$44).
In the wholesale market of the Greater São Paulo, the average price of the beef carcass of BRL6.73 (US$3.06) per kilogramme is 8.2% above that in the same period of August 2012 at BRL6.22 (US$2.83) per kilogramme, but 1.3% smaller compared to that registered in the first fortnight of September 2012 at BRL6.82 (US$3.10) per kilogramme.
In the poultry market, chicken quotes have been rising since mid-June. In São Paulo State, prices have risen 66%, changing from BRL1.75/kilogramme (US$0.80) roughly three months ago to BRL2.90 (US$1.32) per kilogramme on September 16.
In Pará de Minas (Minas Gerais State), the average was BRL2.83 (US$1.29) per kilogramme on the same day, for an increase of 56% in the period, affected mainly by the low supply of animals available in the market.
Apinco (Brazilian Chick Producers Association) data indicate that the output of chicks dropped 6.9% from May to June, which represents a decrease of 36.62 million animals. Most significant decreases were registered in the Southern and south eastern regions, with decreases of 19.5 and eight million animals, respectively. Players surveyed by CEPEA say that the production continued at low levels in the following months, resulting in new price rises for chicken.