Brazil in a flap because of CRV: from closed slaughterhouses to “couro verde”

Brazil in a flap because of CRV: from closed slaughterhouses to “couro verde”

Slaughterhouses are closed and meat production has dropped by 9.2%. In the meantime, the prices of raw hides have realigned. The pandemic, caused by Coronavirus outbreak, is actually bringing about a number of complicated situations and repercussions on Brazil’s markets. In April 42 meat-manufacturing companies suspended their activity to limit infection rates: consequently, meat production has decreased. Yet, in the last few weeks, global lockdown has been affecting the leather tanning market as well: one can see immediately such consequences.

Closed slaughterhouses

A few days ago, Brazil’s Ministry for Agriculture publicly announced that 42 meat-processing plants have suspended their work activity throughout April. Amongst them, there are 31 cattle slaughterhouses alongside two units for meat processing. For the records, factories are located in several Brazilian states: they account for 9.4% of the overall number, 446 in total, actively running in Brazil. According to Brazilian government, 35 companies themselves decided to shut their own plants, whereas the Ministry imposed only one closure. Other institutions made the decision to shut six more plants.

Production down 9.2%

According to data, provided by the Brazilian Institute of Geography and Statistics (IBGE), in 2020 first quarter cattle slaughtering dropped by 9.2% compared to the same period of 2019. Yet, on the other hand, figures about slaughtering go further down, -10.8%, compared to the previous quarter, that is, the fourth quarter of last year.

Overall, Brazilian slaughterhouses have been processing 7.2 million livestock units, that is, 1.82 million tons of meat in total. Likewise, such figures have been going further down compared to the last few months. More specifically, they have dropped by 6.5% compared to 2019 first quarter and have decreased by 12.8% compared to the previous quarter. As regards leather, Brazil’s largest tanneries publicly announced they have received 7.44 million raw hides and skins throughout 2020 first quarter. Which means 12.2% less compared to the same period of last year and 5.7% less compared, instead, to 2019 closing figures.

Prices realign

According to a survey, carried out by Scot Consultoria, subsequently quoted by, a downturn in demand has brought about an increase in the price of raw hides and skins, the so-called “couro verde”, over the last week. For the records, in Central Brazil, first choice raw hides and skins cost, on average, 0.50 reals per kilo. Therefore, prices have increased by 11.1% compared to the previous week. In contrast, in the State of Rio Grande do Sul, reportedly there was no increase whatsoever. Here raw hides and skins cost 0.45 reals per kilo (that is, 0.077 US dollars or 0.072 euros).

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