Brazilian Beef Industry Has Plans to Weather the Crisis

Brazilian slaughterhouse Beef exports by Brazil, from January to November, totaled US$ 5 billion, representing growth of 22.3% compared with the same period of last year. In terms of volume, however, shipments saw a decrease of 14.4%, having totaled 1.29 million tons.

"We are very much dependent on Russia, which is being seriously affected by the crisis and is undergoing credit-related problems," stated the president at the Brazilian Beef Industry and Exporters Association (Abiec), Roberto Gianetti da Fonseca.

The Russian market, which answers to 38% of foreign sales of the Brazilian product, is the leading export destination. From January to November, Brazil exported the equivalent to US$ 1.4 billion to that country. Shipments totaled 371,960 tons during the period. According to Fonseca, in the face of the crisis, the organization's strategy consists of diversifying its markets.

The growth of exports, in terms of value, according to Fonseca, is a result of the 40% increase in international meat prices. The president at Abiec estimates that foreign sales should be between US$ 5.3 billion and US$ 5.4 billion in December, and the volume should be between 1.3 million tons and 1.35 million tons. "The year of 2008 was a memorable one. It was positive," he said.

In 2009, the Abiec expects to maintain the shipped volume and export figures achieved this year. According to Fonseca, the price of beef should fall, because there is great supply and little demand. "We are already renegotiating prices," he said.

The president also stated that next year the organization is going to work in order to double its sales to the European Union, which embargoed Brazilian beef this year, prompting a decrease in exports to the region.

With regard to the crisis, Fonseca stated that Brazil has to face it with courage, creativity and daringness. "The beef industry is not going to be as affected as other industries of animal origin (such as chicken and pork)," he said.

According to him, the beef industry should be the least affected, because it is able to adjust itself to the supply. "Whenever there is an excess supply, we leave the cattle on the pasture for a while longer, at not that high a cost (compared with other sectors)," he stated.

Last month, Brazilian beef exports decreased by 34.4% in shipped volume, which totaled 83,430 tons, as against 127,200 tons in November 2007. Foreign sales totaled US$ 335.72 million, representing a reduction of 13.8% compared with the same month of last year.

"This was the first month in many years in which there was a reduction in value compared with the same month of the previous year," said Fonseca, who attributed the 76.8% decrease in volume and 69.5% decrease in export value to Russia.

In November, the leading buyer of the Brazilian product was Venezuela, followed by Russia, Iran, Hong Kong and Egypt. According to Fonseca, Venezuela and Iran are great potential buyers of Brazilian beef. "Those are oil producer countries," he said.

Anba

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