Pig farming chain sees signs of a milder crisis ahead

Since last year, the Brazilian pig farming industry has been operating under a red flag. However, pork producers have seen signs that a milder crisis may be lying ahead since April, both in the domestic and foreign markets.

“The situation now is much better than it was a few weeks ago because not only did producer income stop falling, but it also showed a reaction,” said Marcelo Lopes, president of the Brazilian Association of Pig Breeders (ABCS), in a newsletter released on the 29th. The quotations began to reflect a resumption of exports as well as more favorable conditions for domestic consumption.

On the external front, shipments once again surpassed 90 thousand tonnes in March (91.4 thousand), and according to data from the Foreign Trade Secretariat (Secex), April maintained a similar performance.

See below the track record of Brazilian pork exports to China and other key commercial partners of Brazil in the international animal protein trade. These data are from DataLiner.

Brazilian Pork Exports to China | Jan 2021 – Mar 2022 | WTMT

Source: DataLiner (click here to request a demo)

Brazilian Pork Exports to Japan, Singapore, and Vietnam | Jan 2021 – Mar 2022 | WTMT

Source: DataLiner (click here to request a demo)

Ricardo Santin, president of the Brazilian Animal Protein Association (ABPA), points out that the recovery trend in pig farming has also been present in prices. In February, foreign sales totaled 71.5 thousand tonnes. Even though the March result was still  16.3% lower than the same month in 2021, the basis of comparison was unusually high at the time, given the production boom that occurred due to the flexibilization of social isolation measures.

With the increase in the volume exported and the reaction of prices, shipments tend to generate profit. On average, sales abroad were being made at a loss of at least R$ 1 per kilo.

On top of that, the prospect of an increase in the supply of corn in the country, thanks to a record interim harvest, raises hopes that the price of animal feed will decrease.

Although corn futures on the Chicago Stock Exchange reached their highest levels in ten years in the middle of the month, corn prices in the domestic market continued to fall, owing to expectations of a large harvest volume in the second harvest,” according to expectations to the ABCS.

Source: Valor Econômico

To read the full original article, please go to:

https://valor.globo.com/agronegocios/noticia/2022/05/09/cadeia-da-suinocultura-ve-indicios-de-tregua-na-crise.ghtml

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