Porto Alegre, December 4, 2020 – The dynamics of the Brazilian swine market changed significantly during the second half of November. Meat-packers are adopting a more retracted stance in the negotiations involving live pigs, pointing to a good position of stocks for the expected year-end demand, just with some adjustments to be made.
Moreover, for some weeks, meat-packers have mentioned the difficulty in passing costs on to the final consumer. Part of the movement of recent highs came from purchases in large volumes of the industry, aiming exactly to meet this year-end consumption.
The psychological factor also acts and may continue to affect business in the short term, since farmers can go more to the market, bringing forward the sale of light animals, especially in the current cost scenario, which may lead to new lows. Between wholesale and retail, an increase in the flow of business is expected in the short term, considering the entry of the thirteenth salary and bonuses in the economy, besides the festivities. The expectation now is around the business environment as of January, considering that historically the profile is more restrained in the first quarter of the year.