Porto Alegre, April 6, 2023 – Animal health problems are the major agenda of the just-finished first quarter. In different ways, Avian Influenza, BSE, and African Swine Fever (ASF) remained present in the market, causing instabilities:
– African swine fever. Speculative news published in the market, such as the recent report by international agencies regarding ASF in China, must be investigated carefully before taking any decision related to production progress. It is worth noting that there is indeed the possibility of sporadic and isolated cases of ASF in China, but nothing devastating as recently reported. Chinese pig farming is currently professional, which ends up helping to control any health problems. The World Organization for Animal Health (WOAH) and the Chinese government have not confirmed cases of the disease in the country. Not even the live pig futures listed in Dalian show a stressful scenario ahead. What happens is that the pork supply is high, and less efficient pig farmers must keep accelerating the sale of animals for slaughter due to losses. China must continue to buy good volumes from Brazil in the coming few months, but that must not result in strong advances in the export result in the final numbers of 2023;
– Avian Influenza. The Influenza situation seems to be giving a truce in Brazil. The cases have had consequences in Argentina and Chile, but more serious problems seem far from Brazil since migratory birds are starting to return to North America. In addition, Brazil adopts protective measures against the disease, suspended fairs where there is an agglomeration of birds, and also restricted outdoor poultry farming. It is worth pointing out that the main Brazilian farms strictly follow the main animal health standards, in which case the risk of contagion is minimal. The same cannot be said about the situation in North America and Europe, the main outbreaks of the disease with the greatest losses;
– Atypical case of BSE in Pará. After 30 days of many problems, China has resumed purchases of Brazilian beef, the market is back in line and about to return to normality. The attempt to renegotiate the health protocol was rejected by Chinese authorities. New accreditation may occur in the next few days, which suggests a greater export flow. The great focus of attention is on the decline in average beef prices in the international market since last year, affecting South America, and renegotiations have been a constant in recent weeks.
Even in the face of the health problems that surround Brazil, it is safe to say that the country will maintain the global leadership of beef shipments and that the global leadership of chicken meat will be even quieter. The fact is that there is a lack of alternatives capable of replacing Brazil globally. Another aspect that contributes to commodity exports needs to be mentioned: the exchange rate remains favorable in Brazil and the rest of South America.
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