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2012: Cost Crisis Followed by Price Recovery

by 5m Editor
18 December 2012, at 1:30pm

BRAZIL - The year 2012 has been marked internally by a crisis of cost pressure in the pork industry. Higher corn and soybean prices have led to a rapid rise in production costs, thereby reducing profitability for producers and slaughterhouses.

The disadvantages faced during the first half of the year was more severe for companies that only sell fresh products domestically as well as to dependents of the Russian and Argentine markets, where there were embargoes. However, according to assessments made by the Brazilian Association of Producers and Exporters of Pork (ABIPECS), for companies with a higher degree of industrialisation, sales of processed products suffered no interruptions.

Companies focused on market cuts (fresh) were the most affected by cost pressures - there was a fall in exports and thus, they had to face difficulties in placing their products on the domestic market.

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