Sindirações see difficulty to reach production goal in 2015 by crisis

The animal feed industry, which tends to reflect the performance of the meat producers in Brazil, says that the economic crisis through which passes the country should be an obstacle to the industry fulfill its goal of production increase of 3 percent in 2015, despite lower costs of raw materials, such as soybeans and corn.

"We are absurdly optimistic about an increase of 3 percent," said Reuters Ariovaldo Zani, Executive Vice President of Sindirações, an organization that brings together companies such as BRF, Ouro Fino and the agribusiness multinationals like ADM.

Zani cited the high inflation, the highest prime rate, plus a weaker labor market, among the factors behind the pessimism with the own goal of growth of feed industry production, which moves annually about 50 billion reais, considering only the values of the raw materials, such as soybeans and corn.

According to the leader of the Association, the uncertainties in "domestic" concerns much more than external issues to the feed industry, also dependent on the pace of exports of meats, especially poultry.

But there are also fears externally, as the fall in oil prices, which may affect the income of Middle Eastern countries, important buyers of chicken meat from Brazil, the crisis in Russia, big market for Brazilian refrigerators, and also a slower growth of China.

The expected growth, even if it is reached, will represent a smaller rate than seen in 2014, when the industry raised production by 4.3 percent in 2013, compared to 67.4 million tons, with the best performance of recent years. An increase of 3 percent in 2015 would raise production to just over 69 million tonnes.

"To make matters worse, we have perspective and energy rationing of water, mainly in the Southeast," he added, explaining that these threats, if implemented, it would affect both the sector, not least because the expectation of growth is relatively low.

In 2014, the total produced by feed industry, the poultry sector accounted for more than 50 percent, or 37 million tonnes (+3.6 percent before 2013), followed by the thread of feeding pigs with 15.2 million tonnes (+2 per cent). The demand of cattle raising was of 8 million tonnes (+6.3 percent)
Considering only the value of the raw materials used for the production of feed, such as soybeans and corn, the sector moved in 2014 about 49 billion reais.

To 2015, whereas the projection of growth of production, against a backdrop of lower prices, the expectation is for moving 52 billion reais, said Zani, noting that prices of soybeans and corn in January and February are smaller compared to 2014, for contta of the big crops globally.


EXCHANGE

If there's something positive for the sector in 2015, these variable is a stronger dollar against the real, which can raise the competitiveness of Brazil's meat exports, with positive reflection for the feed industry.

"The exchange rate devaluation for the exporter is a marvel, but the exchange rate also affects inflation", said the Deputy Chief Executive of the Sindirações.

But he weighed the dollar, depending on the level, makes the Brazilian product "without adversary" in the international market.

The Brazil is the largest exporter of beef and chicken, but the bulk of the country's production is consumed internally.