Prices of corned beef are continuing upward as Brazil wrestles with a weakening currency, the real, against a stronger US dollar.
A Brazilian packer said: “Traders believe the industry is making excessive profits. Export prices have risen 25% in two months, but we are not getting an acceptable return in reals.”
Forequarter meat and trimmings used in corned beef manufacture are required by Russia, South Africa and Eastern Europe in unprecedented quantities for local production. At least one Brazilian canner is believed to have opted to export trimmings. Quotes for frozen trimmings are now at US$1,700/tonne.
Pork raw material costs for canners, which rose sharply in 2004 as Eastern European producers sourced product from Holland and Denmark, have levelled out. This is mostly due to China switching to Brazil for its requirements, after a long ban on Brazilian exports.
Total world production of pork is 92 million tonnes, of which China produces 50%. But China’s local consumption still exceeds its ability to produce domestically by 700,000 tonnes a year. Russia has switched its pork sourcing from Europe to Brazil. The move has resulted in European pork production being just ahead of demand, hence a more stable price. Europe still maintains a ban on Brazilian pork products.
As the Alaskan salmon season approaches, packers are reviewing forecasts on how much fish will be available and the expected ratio between canned and frozen. As Japan switches back to wild from farmed, the Alaskans are likely to maximise their opportunities in the frozen sector.
UK traders will not speculate on likely red prices, but privately they must be preparing themselves for increases after two years of unchanged fob levels.
Raw pork costs level out
Salmon season speculation