Pandemic impacts demand of pigs, and prices fall in Brazilian market

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Prices in the meat chain are under pressure in the country, reflecting the sharp drop in demand, due to the deepening of the coronavirus crisis. Restrictive social mobility measures aimed at reducing the spread of the disease, such as the closing of restaurants, malls, schools, part of commerce and other activities, hinder the meat flow.

The business environment between wholesale and retail has slowed down, with cautious retailers, as their stocks are capable of meeting consumers’ demands in the coming few days, besides the uncertainty surrounding the recovery of demand in the short term. In a crisis environment, households tend to tighten their budgets and look for more affordable substitute products. It is worth noting that pork is relatively cheap, but the main beneficiary must be chicken in the current economic scenario.

Besides retail, some slaughterhouses report that their chambers are full, leading to less involvement in the acquisition of animals for slaughter. In several locations in the country, orders signed in the period before the crisis are being canceled, further locking the chain. With a slower pace of negotiations, animals will stay longer on farms, consuming feedstuff and gaining weight, creating additional costs to farmers, who already face deteriorating operating margins, with deficit in several locations of the country.