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Situation is complex for Brazilian beef industry

Staff writer |
It seems Brazilian beef exports this year are not in line to display a repeat performance of 2015.

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Trade data for the first quarter of 2016 show exports increasing by 45,000 tonnes on the year, up almost 24 percent.

These numbers may suggest a change of fortunes for the sector. Behind this data, however, the situation is more complex for the Brazilian beef industry.

The country is in one of its worst recessions in recent times. This has been exasperated by findings and accusations of corruption taking place at the highest political level.

This has had an impact on domestic consumption, which typically accounts for about 80 percent of production. Consumers now have reduced purchasing power and are starting to switch to cheaper proteins such as poultry.

Consequently, exports are starting to assume a more important role for the Brazilian beef industry.

Brazil has encountered a number of challenges in foreign markets in the last two years which has seen a significant realignment in exports and a shift in focus from energy dependent economies.

This realignment has seen shipments to markets such as Russia and Venezuela decline significantly over the past couple of years.

In contrast, markets in the Middle East and North Africa region (MENA) have become increasingly important, most notably Egypt and Iran, despite competition for market share in this region being intense for low value product.

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