BRAZIL – Extra Russian demand is seeing ‘soaring’ pork prices in Brazil which is now inflating beef and chicken markets at a low supply ebb.
The national price surge is driven by increased demand following Russian trade sanctions due to limited availability across protein segments, says the Centre for Advanced Studies on Applied Economics.
Brazil’s swine and cattle herds have contracted, meaning limited pork and beef availability through 2014 has been inflamed by export demand this month.
Chicken prices have subsequently lifted after consumers turned to poultry.
Exceptionally high pork prices have hit the Sao Paulo and Minas Gerais regions which CEPEA pins on the prevailing independent market.
“These areas react faster to changes in market conditions,” CEPEA explained in a monthly update. “Due to higher hog prices, slaughterers and wholesalers have pushed up carcasses and cuts.”
Cepea market intelligence states that high prices may put consumers off meat entirely.
Analysts are expecting a ‘counterbalance’ effect from exports if consumption weakens.
Russia, importing 35.7 per cent of Russian meat this year is Brazil’s prime destination leading Hong Kong, Angola and Singapore.
Cepea added: “Pork shipments usually move up in the second semester and this year may be reinforced by increasing Russian purchases.”
Cattle prices are also elevated. Calf prices are 20.2 per cent higher on the national index for July.
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