Brazil’s soccer success not matched by its pork export performance

 It’s the World Cup and Brazil will be in the news this month as soccer players show off their skills. Brazil is famous for its soccer and its economy has grown in the last decade with its agriculture and agri-business  pushed to perform at world class levels. But has Brazil’s pig industry been winning in the global market for pork exports and can it top the league of global pork exporters in the future?   At first sight the relatively weak Brazilian Real, huge grain and soya supplies, and the existence of some of the world’s largest meat companies in Brazil suggests that Brazil’s pig sector has some “natural” advantages in exporting.  But when we examine the data Brazil’s export performance seems to be stuck on a plateau – not exactly a World Cup winner if this was a soccer competition.  Brazil’s total pork exports have been declining or relatively unchanged in recent years. My chart shows the pattern of Brazil’s export sales and a simple trend line running through them since 2005. The pattern suggests stability rather than growth – middle of the table rather than soccer league champions – especially when we remember that, in the latter part of this period, the global pork export trade has been expanding significantly.  

Brazil’s total pork exports fell by 11% between 2012 and 2013 and in the first four months of 2014 total pork exports fell by almost 2% according to the data released by ABIPECS, the Brazilian Pork Industry and Exporter Association.  Brazil exportsWhen we look at the key destinations for Brazil’s pork exports it is clear who the important customers are: Russia and Hong Kong buy about half of Brazil’s pork exports each year. Add in Singapore and Portuguese-speaking Angola and the share goes up to about 60%. It could be argued that at least three of these customers (Russia, HK and Angola) have been “pulling” in Brazilian pork rather than Brazil developing demand for its products in these countries over the years. Within this group there have been winners and losers but the #1 winner has been Russia – it’s a key market. Russia’s complaints about ractopamine in US pork and the outbreaks of ASF in the EU have encouraged Brazil (and casual observers) to think that Russia will increase its purchases from Brazil. But the numbers don’t stack up for that scenario. The analogy between Brazil’s soccer success and the country’s potential for pork export sales can be carried too far but it seems to me that Brazil isn’t likely to make great gains in the global export market based upon its past performance.

You can read more about Brazil’s export performance and its chances of gaining global market share in the May issue of Whole Hog Brief