The combination of the African Swine Fever, which generated the slaughter of nearly 200 million hogs in China, and the trade war waged between the U.S and China benefits Brazil in many ways.
The South American country has exported not just more corn, as a result of the Chinese retaliatory measures toward the U.S., but more hogs.
In the first six months of 2019, Brazil has exported 346.600 tons of swine or $699.7 million worth, according to data from the Brazilian Association of Animal Protein (ABPA, short in Portuguese) says. The value is 23.4% higher than the same period of last year, while the volume is 24.5% above the first six months of 2015.
In April alone, it was the largest volume of Brazilian swine exports since 1997, when these statistics started to be accounted.
For ABPA, there will be more growth during the second half of the year because the impact of the African Swine Fever will favor prices in Brazil even more than in the first half of 2019.
In Brazil, swine production is concentrated in the three southern states. Typically, hog farmers are integrated with a coop, receiving the piglet, the meal, vaccines and technical assistance from purchasers.
Once processed, the pork product is valued according to its productive efficiency.
In the southern part of Brazil, approximately 80% of producers are in this system.
Some farmers integrated in that system say they did not see as much of a difference in prices, since the ASF outbreak, because some other costs have also increased, like labor, facilities, maintenance, land value, etc.
“We are feeling the pain of these costs being higher,” said Jacir Dariva, president of the Swine Producers Association of the state of Paraná. Typical payments for producers were $0.50 per pound of swine, while the FOB cost (at the port) was $1 per pound.
OTHER MEAT EXPORTS
But, pork is not the only meat that the Chinese have bought from Brazil. Also, also beef and poultry exports are up.
In the case of beef exports, Brazil has seen an increase of over 50%, also pushed by Russian demand.
“There is a clear replacement of swine meat for other meat. All the countries combined cannot supply what China needs of swine meat,” state Francisco Turra, president of the ABPA.
“Brazil has a good quality of meat and competitive prices, which puts us in the radar of Chinese purchasers,” said market analyst Douglas Coelho from Radar Investimentos, based in Sao Paulo.
The Brazilian government has worked to allow 50 more processing facilities of pork and poultry production to export to China.
The current number of processing plants allowed to export to China is about half of that.
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