SAO PAULO – The cost of red meat in Brazil has rocketed due to a sharp increase in sales to China and a strong US dollar that has boosted exports.
The price of beef in Brazil has risen 40 percent in the last two months leaving many consumers unable to afford it.
The Latin American country is the largest exporter of red meat in the world.
This week the price of beef reached historic levels costing 16.12 reais ($3.85) per kilo in the state of Sao Paulo, the most populous in the country.
“The price increase is not due to the increase in consumption, but to the restriction of supply” agronomist Alcides Torres, a specialist at Scot consultancy told EFE.
The price increase was predictable because “it is part of a cycle, but what couldn’t have been foreseen was the high demand of the Chinese market, the expert added.
The hike in exports could be linked to an outbreak of African swine fever.
According to the Brazilian Association of Refrigerators (Abrafrigo), the Asian giant buys 41 percent of the total volume of beef exports from Brazil and in recent months demand has increased.
According to Abrafrigo, several factors have contributed to a hike in the price of meat to record levels which have generated a speculative environment in Brazil, a country where there are more cows than people.
A strengthening of the US dollar, which has fuelled exports, and the fact the year is coming to close, a time that usually sees an increase in meat consumption, were factors that had contributed to the rise in prices.
Experts at the association have said that there is no risk of shortage in the domestic market and that because current prices are not sustainable in the long term, consumers can expect the situation to normalize at some point.
However, a return to the prices of previous months was not expected, according to Abrafrigo’s projections.
Brazilian pockets have already started to notice the shift in prices.
Torres estimated that each Brazilian consumes 35 kilos of beef per year.
However, there are differences in consumption across the country, the agronomist added.
In southern regions, such as Santa Catarina, Brazilians eat 50 kilos a year, compared to the 17 kilos that the poorest regions in northeast Brazil consume.
Domestic consumption is what keeps the engine of this sector running, with 80 percent of the country’s meat production funneled into internal markets, compared to the 20 percent diverted to exports, Torres told EFE.
“We have felt it and the so have the customers,” Lucas Arujo, a butcher in the São Paulo neighborhood of Vila Mariana, lamented.
In recent weeks consumption has slowed down in his shop, where the price per kilo of beef increased slightly less than a dollar.
“In Brazil, we have many people who cannot pay this price, who are unemployed and these people, who are the vast majority, are the ones affected,” he said.