Smaller production in Europe opens doors to Brazil – 03/30/2023 – Vaivém

On Thursday (30), the Europeans released their short-term projections for grains and meat. The numbers indicate opportunities for Brazil.

Strongly affected by an adverse climate, grain production in the European Union drops to 266 million tons in 2022/23, a volume 7% lower than the average of the last five years.

The continent also presents a reduction in the production of proteins, which opens doors for Brazil. This increase, however, is limited.

This year, Europeans will consume, for the first time, a volume of beef below 10 kg per person. It will be 9.9 kg.

Data from the European Commission indicate that protein consumption in the European Union, including beef, pork, chicken and sheep, dropped to 65 kilos this year, 4.9 less than five years ago.

Lower grain production in 2022/23 forces the bloc to import 35 million tons of cereals, 44% more than the average of the last five years. Exports fell to 44 million, 8% less in the period.

For 2023/24, if the weather helps, the European Union expects a recovery in grain production to 288 million tons, 8% more than the previous year. With this, the scenario for exporting and importing Europeans improves.

In the meat sector, the challenges are a little more complicated. Diseases that affect the continent, such as African swine fever and avian flu, inhibit production and affect the bloc’s exports.

Beef production drops 2% this year, forcing Europeans to increase imports of protein from South America. In the poultry sector, avian flu inhibits production, which should grow by only 1%. Internal prices rise and make exports difficult.

In the assessment of the European Commission, imports should grow by 7% in 2023, and Brazil, due to more favorable production costs, is gaining space, both in Europe and in other importing markets.

The pork production of Europeans has a 5% retraction this year. Restricted supply and high prices hamper exports, which will fall 5%, according to an assessment by the European Commission.

The drop in grain production in Europe favors the entry of Brazilian products into the continent, mainly corn. Difficulties in the protein sector, however, force Europe to import more and leave more space for Brazil in markets occupied by it.

This is the case in China. In 2022, Europeans exported 50% less pork to the Chinese due to African swine fever on the continent. This year, the decline will continue.

African swine fever is present in both Europe and China. In the Asian country, outbreaks have increased significantly since 2018. Partially controlled in recent years, they are starting to reappear.

The worsening of the disease will force China to import more from Brazil, since the Europeans have less volume to export.

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