BRAZIL-TRADE: Pork Becomes Meat Export Leader

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Nov 6 1997 (IPS) - A sharp rise in the volume of pork exported from Brazil should continue next year when sales would top those of beef products, according to latest figures.

The combined meat export market will depend in part on how the major importing countries resolve their financial problems as well as on the sanitary restrictions that keep some products from Brazil out of certain markets, exporters say.

Brazil produced 1.6 million tons of pork last year but exported only 39,000 tons valued at 93 million dollars. This year, the Brazilian Association of Pork Meat Exporters (ABECS) plans to export 65,000 tons of pork for expected revenue of 150 million dollars and new markets in Africa and Europe have raised export projections to 250,000 tons and 600 million dollars in the next two years.

This last figure matches the revenue obtained from beef exports last year which were worth 420 million dollars. beef exports have declined as Brazilian meat is more expensive than Argentine beef, and this country has faced restrictions due an outbreak of hoof- and-mouth disease in Brazilian cattle.

Hong Kong, the initial epicenter of current global financial tremors, is the main importer of Brazilian pork, taking in 44 percent of the total. Argentina is a close second, taking 40 percent of Brazil’s pork exports.

Coincidentally, these countries have identical monetary policies consisting of a fixed parity with the US dollar. Due to the rigidity of their fiscal policies, both of their economies are threatened by the “speculative attacks” of international investors.

With the fall of the stock market and the hikes in interest rates implemented shore-up the national currency, Honk Kong could reduce imports in the face of possible declines in economic activity and local demand. Moreover, there is a threat of devaluation.

The worldwide consumption of pork is higher than that of any other meat, in spite the fact that beef has a larger presence in international trade. Some 70 million tons of pork are consumed yearly, in comparison to 45 million tons of beef, according to ABECS.

The enormous population of Asia, where there is high consumption and massive production for internal markets, explains this situation. China alone consumes almost 30 million tons of pork per year, which represents about 24 kilograms per person – three times the average per capita consumption in Latin America, ABECS says.

Italy plans to import 140,000 tons of Brazilian pork each year – one-fifth of its total imports – which would triple Brazilian sales. Russia, which imports 80 percent of the 850,000 tons that it consumes each year, is already waiting for the first Brazilian shipments, which could potentially reach 45,000 tons per year.

These transaction, however, currently are awaiting sanitary certification. Luckily for Brazil, pork production is concentrated in the states of Santa Catarina and Rio Grande do Sul, where there have been no reported cases of disease and where controls are regarded as trustworthy.

The European Union has threatened to deny certification and maintain restrictions on all meats from Brazil, regardless of where they are produced. Claudio Martins, secretary of the Brazilian Association of Chicken Exporters, warned that such action could preclude sales to Italy and other markets.

According to Martins, this violates norms established by the World Trade Organization, which allow limited areas of a particular country to be certified as free from animal diseases and therefore suitable for export production.

There are also problems with Argentina, whose producers accuse the Brazilian pork industry of unfair competition within Mercosur, because of the state subsidies which indirectly pay for 17 percent of the corn used to feed the animals.

This is a reaction to the dramatic penetration of Brazilian pork into the Argentine market. In Argentina there are no subsidies. According to producers from Santa Catarina where the majority of export production is located, Brazil’s integrated system of pork production and low wages gives its products the competitive edge.

New possibilities in Europe and Asia were also created when Taiwan suspended its pork exports due to an outbreak of disease there. Supply diminished by 230,000 tons annually, affecting especially Japan, the biggest importer in the world.

ABECS president Sergio Waldrich trusts that this scarcity will make the lifting of sanitary restrictions more likely in the most demanding markets, like Europe and Asia. (FIN/IPS/mo/ag/if/mg/97)