Brazilian meat prices react consistently in first half of August

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Porto Alegre, August 13, 2020 – Wholesale meat prices showed a very satisfactory upward movement over the first half of the month in the Brazil’s main consumer hub, São Paulo. There are some decisive factors for understanding all this movement, amid them:

• Advanced reopening in the state. The reopening process in São Paulo is going on as planned. In early July, restaurants and other establishments in the state capital were reopened to the public. In the interior, some municipalities enjoy a similar situation, favoring a good replenishment along the production chain;

• Celebration of Father’s Day. Still focusing the analysis on the domestic environment, the celebration of Father’s Day usually boosts consumption. This year, despite the limitations caused by the pandemic, there was still room for improvement in demand, favoring the reaction of meat prices;

• Exports. The result of shipments in July was very positive, with pork and beef standing out. With the good exported volume, the domestic market supply has been reduced, increasing the propensity for adjustments;

• For pigs, in particular, the slaughter of lighter animals is also evidenced, resulting in a lower supply of meat at this time, which also favors the understanding of the aggressive increase in the prices of pork carcass;

• Restricted supply of finished animals. In the meat market, the supply restriction persists, keeping slaughterhouses with shortened slaughter schedules, positioned between two and three business days.

For the second half of the month, there will be less appeal to consumption. In any case, there is no room for a sharp change in the price curve. The assessment for the rest of the semester still points to the continued focus on the export market, something quite natural given the buying need of the main Brazilian trading partner: China.