Source: Bob Moser, MEATINGPLACE, 8/19/14


Russia's decision since Aug. 6 to rapidly increase food imports from Brazil should lead to an increase in prices for Brazilian pork and poultry, but will have limited effect on the price per ton of Brazil's beef exports, according to local industry analysts.

Brazilian poultry's price should trend upward faster than other protein segments because it has the biggest gap to fill for Russia. The United States was the top poultry exporter to Russia in 2013 with 266,000 metric tons of a total 527,000 tons imported, while Brazil shipped just 54,000 tons to Russia last year.

“There is a huge opportunity here, but we need to wait to see the pace of purchases from Russia, but should  orders increase in the coming months I think prices will rise,” Cesar de Castro Alves, analyst with Brazilian agribusiness consultancy MB Agro, told Meatingplace.

“(Brazilian) poultry is lagging behind pork and beef in terms of price, and the industry is able to respond now with greater supply availability, relatively quickly,” Castro Alves said. “I think poultry processors do not need to choose where to sell at the moment, they have capacity to attend (any market), especially because some important export markets are relatively weak, the biggest case being United Arab Emirates.”

Ninety-three processing plants in Brazil for fresh beef, poultry, pork and related offal have been approved for export by Russia since Aug. 6, nearly tripling the number of Brazilian processors previously approved, following a full ban on imports of protein meat from the United States, Australia and other countries for a full year.

Poultry cuts in greater demand from Russia like thighs and drumsticks should show the greatest price increases immediately. With Brazilian poultry prices currently about 5 percent below the same period a year ago the market has room to increase, said Domingos Martins, president of poultry trade union Sindiavipar in Parana state, in an interview with Reuters Brasil.

The average price per kilogram of chilled poultry has risen 3 percent since Aug. 6 in Toledo, Parana state, where the largest producer and exporter of the product in Brazil is located, following Russia's announcement last week. Pork's average price per kilogram is up 2.2 percent since the same date, according to Brazil's Center for Advanced Studies and Applied Economics, Cepea.

Brazil is already the top exporter of pork and beef to Russia, but the potential for price increases is strong because both cattle and swine availability are limited in Brazil through the rest of this year, and new export demand will prompt price increases domestically, Castro Alves said.

For Brazil's beef sector, the impact of Russia's demand on export prices should be minimal because domestic demand has been sluggish, Alex Silva, analyst with Scot Consultoria, told Reuters. A stagnant Brazilian economy has limited beef sales at home, and Russian demand is typically for front-end beef cuts that are considered the cheapest, he said.

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