The decline in prices is a result of economic recession, Mintec states. In addition, beef exports decreased in the first six months of 2015, down 18% year on year.
“The drop in Brazilian exports was mainly driven by weak demand from two of Brazil’s main beef importers: Russia and Venezuela. These two countries are major oil producers, with their economies relying mainly on oil exports. Therefore, the economic impact driven by the drop in oil prices from 2014 has made imports of Brazilian beef less affordable for Russia and Venezuela,” according to Mintec.
However, the picture for the Brazilian beef industry is more positive in the months ahead. According to Mintec, Brazil’s beef exports to emerging markets are likely to increase in the next few months, driven by current low beef prices.
Imports to Egypt, Brazil’s main beef market in the Arab world, were up 46% year on year in September 2015, while exports also increased year on year to the UAE, Jordan, Palestine and Oman during the same period.
In addition, in May 2015 China lifted a three-year ban on Brazilian beef, in place over concerns around bovine spongiform encephalopathy (BSE). By August 2015, eight Brazilian beef producers had already received clearance to export to China. Brazilian beef exports in September 2015 were the highest in the year so far, at 117,700 tonnes.
The increase in exports is likely to push Brazil’s beef prices upwards short term, the Mintec report concluded.