Brazil Hog Quotes Increasing

23 September 2013, at 2:44pm

BRAZIL - In the first fortnight of September, hog quotes resumed increasing, affected mainly by the low volume of slaughter-ready animals.

In the Southeastern region of Brazil, this trend has been verified more significantly, where independent producers are more common to find.

Hog price rises, in turn, have been transferred with less intensity to the wholesale market of the Greater São Paulo. According to Cepea information, slaughterhouses say that they face difficulties to sell pork at higher quotes to end consumers.

The upward trend that was observed during August weakened at the end of that month, due to the slight increase of the hog volume available in the market.

Fed cattle and meat quotes have been registering significant increases in September, affected mainly by the limited supply compared to the demand.

The ESALQ/BM&FBovespa Index (São Paulo market) closed at 106.78 reais (46.89 dollars) on 16 September, the highest nominal level since 24 November, 2010, when the average was 107.92 reais.

In regard of the beef carcass, the average on 16 September in the wholesale market of the Greater São Paulo was 6.93 reais (3.04 dollars) per kilo, the highest price level since November/11 – on November 21, 2011, the average was 6.97 reais per kilo.

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 the partial of September (until Sept. 16), the São Paulo market averaged 105.48 reais, 4.3 per cent more than in the same period of August/13 (101.11 reais) and 9.7 per cent above that in the first fortnight of September/12 (96.16 reais).

In the wholesale market of the Greater São Paulo, the average price of the beef carcass, of 6.73 reais per kilo, is 8.2 per cent above that in the same period of August/12 (6.22 reais per kilo), but 1.3 per cent smaller compared to that registered in the first fortnight of September/12 (6.82 reais per kilo).

In the poultry market, chicken quotes have been moving up since mid-June. In São Paulo State, prices have upped 66 per cent, changing from 1.75 reais per kilo roughly three months ago to 2.90 reais (1.27 dollar) per kilo on 16 September.

In Pará de Minas (Minas Gerais State), the average was 2.83 reais (1.24 dollar) per kilo on the same day, for an increase of 56 per cent in the period. Quotes have been 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 per cent from May to June (the most recent data available), which represents a decrease of 36.62 million animals.

Most significant decreases were registered in the Southern and Southeastern regions, with decreases of 19.5 and 8 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.