Cepea, October 4, 2021
CATTLE – The downward trend of fed cattle prices, observed since early September, became more intense in the second fortnight of the month.
In the first weeks of September, news about two cases of mad-cow disease in Brazil drove purchasers away from the national market, which pressed down the values for fed cattle. Later in the month, the sales pace for beef slowed down in the wholesale market of the Greater São Paulo. Besides, Brazilian beef exports to China, the major destination for the national product, are still halted, increasing beef supply in the domestic market.
Thus, in September, the CEPEA/B3 Index for fed cattle decreased by 6.96%, closing at 291.60 BRL (53.63 USD) on Sept. 30. This is the steepest monthly decrease since January 2020, when this Index dropped by 7.8% in the month. The monthly average in September closed at 302.05 BRL, 4.2% lower than that in August.
In the wholesale market of the Greater São Paulo, the price for beef carcass dropped in September too. The purchase power of the Brazilian population has been weak for months, while beef prices are still at high levels, despite the recent devaluations. Thus, many purchasers opt for buying pork and chicken meat or eggs, which are cheaper.
As regards exports, agents are becoming concerned about the ban imposed by China on the Brazilian beef, since they expected it not to last long (based on the current low world supply of beef and the Chinese dependence on the Brazilian product). Besides, China usually increases beef imports in the last months of the year because of the Chinese New Year. However, despite the ban from China, Brazilian beef exports were high in September, which limited steeper devaluations for fed cattle in the domestic market.
SWINE – The prices for pork carcass dropped in September, while for beef, values did not decrease as much, and for chicken, prices increased. This scenario boosted the competitiveness of pork meat against the other two.
Considering the special pork carcass and beef carcass sold in the wholesale market of the Greater São Paulo, pork carcass was, on the average of the month (until Sept. 28), 10.17 Reais/kg cheaper than beef carcass, price gap 2% wider than that in August and two-fold that from Sept/20.
Compared to whole chicken, also traded in the Greater São Paulo, pork carcass was 1.65 Real/kg more expensive in September, the narrowest price gap since Feb/19, 21.3% narrower than that in August and 72.7% down from that in Sept/2020.
In the Brazilian market of pork meat, consumption was weak last month, and lower demand pressed down the values for pork carcass. On the average of the month (until Sept. 28), the price for special pork carcass closed at 9.91 BRL/kg in the Greater SP, 1.6% lower than that in August and 15.2% down from that in Sept/20, in nominal terms.
POULTRY – Despite the devaluations in late September, the high price levels for chicken meat in the first weeks of the month allowed the monthly averages for several products in the poultry sector (until Sept. 29th) to set real records in the series of Cepea, which began in 2004, in all the Brazilian regions surveyed by Cepea (values were deflated by the IPCA from August/21).
Prices were influenced by the high liquidity for chicken meat (domestic and international) during the month. In late September, with the typical decrease in the purchase power of the population, agents ended up lowering asking prices, aiming to ensure sales and avoid increasing inventories.
Considering whole chicken, both frozen and chilled, the monthly averages in September set real records in all the regions surveyed by Cepea. In the wholesale market of the Greater São Paulo, the average price for the frozen product closed at 8.22 BRL/kg in September, 3.5% higher than that in August; for the chilled product, the average closed at 8.24 BRL/kg, 3.4% up in the same comparison.
In the market of chicken cuts and giblets, in São Paulo city, prices for almost all products set real records in September, except for full wing and heart.
Despite this scenario, the prices for live chicken remained stable in September, at 5.94 BRL/kg on the average of the regions in SP State.
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