Is it Friboi? Exports drive up meat prices in Brazil.
Brazil's major meatpacking companies are taking advantage of the strong dollar and prioritizing the export market over the domestic one, which is reflected in higher food prices at local butcher shops; the exchange rate favors operating results but increases financial expenses; the leader, JBS, recorded a R$ 24 billion increase in total revenue, but saw its profit fall 35% to R$ 219 million.
Goiás247_ Brazilian meatpacking companies' preference for the export market is driving up meat prices in local butcher shops. A report in the Folha de S. Paulo newspaper reveals that the country's three largest meatpacking companies (JBS, Marfrig, and Minerva) are taking advantage of the strong dollar to increase exports at the expense of the domestic market.
The rise in meat prices has affected price indices. Meat is considered one of the main drivers of inflation. In Goiânia, for example, a survey by the Mauro Borges Institute for Research and Statistics identified a 2,11% increase in meat prices in October alone, compared to a consolidated CPI of 0,64% in the same period.
According to Folha, Marfrig's exports of fresh meat represent about 13% of the total sold by Brazil, and have increased by 60% compared to the second quarter of this year. At Minerva, the country's third-largest meatpacking company, exports of fresh meat grew by 40% compared to the third quarter of 2012.
JBS, a leader in meat processing, reported a R$24 billion increase in total revenue, a 25% rise compared to the third quarter of 2012. Exports from its Mercosur division increased by 28%, according to Folha.
The exchange rate favored the operating results of meatpacking companies, but also increased financial expenses, influencing their balance sheets. Marfrig continues to post losses, totaling R$ 194 million in the quarter. Minerva earned R$ 1,4 million, a 93% decrease compared to the second quarter of 2012. JBS saw its profit fall by 35%, to R$ 219 million.