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Pork sector-in-uruguay
 

Pork sector-in-uruguay

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    Pork sector-in-uruguay Pork sector-in-uruguay Document Transcript

    • January 2012 0Pork sector in Uruguay
    • Index1. Introduction............................................................................................................... 32. Sectorial characteristics ............................................................................................ 33. Pork chain in Uruguay................................................................................................... 4 3.1-Structure ................................................................................................................. 4 3.2- Supply and demand ............................................................................................... 74. The global market and commercial opportunities ..................................................... 11 2
    • 1. IntroductionThe pork chain is one out of a set of 13 value chains selected to be impulsed by thegovernment, for which a series of sectorial policies have been defined in order to strengthen,expand and articulate the productive structure of the country, increasing the added value andthe technological content of the Uruguayan production.In particular, its potentials and restrictions were analyzed to increase its production and addvalue to it, seeking strategic objectives and measures to raise the above mentionedrestrictions and exploit its potentials1.This report aims to analyze the recent evolution and the perspectives of the pork sector inUruguay, as well as analyzing the world market and its projections. To such effects, the reportis structured in the following way. The first section presents the main characteristics of thesector in Uruguay; secondly, the structure of the productive chain is examined as well as thesupply and demand of the sector taking into account production, consumption, andcommercial flow. Finally, the structure of the world market and its main perspectives arebriefly commented. 2. Sectorial characteristics Pork meat is the most consumed in the world: 73 million tons in 2010, equivalent to 43 % of the total consumption of meats. This meat is outlined for being a great source of proteins. In average, among 18 to 20 grams of protein per 100 grams of product. In Uruguay there was an increase in the consumption of pork meat in the last years. Although pork meat is the least consumed in our country (10,3% of total meats), in the first semester of 2011 its consumption increased 9% compared to same period of 2010, whereas the consumption of bovine meat, equivalent to 65% of the total consumption of meat, decreased 5,4 % in the same period. Uruguay imports meat and pork fats for its later elaboration. The raw material which supplies the industry of porcine meat is mostly of foreign origin (61%), mainly from Brazil and Chile, whereas the national production represents 39% of the raw material. Uruguay does not have any type of sanitary restriction in the production of pork. Uruguayan trade of pork is basically internal and is commercialized mostly in butcher´s shops and supermarkets.1 Documents are available on the Ministry of Industry, Energy and Mines, National Directorate of Industries-http://www.miem.gub.uy/gxpsites/hgxpp001?5,10,529,O,S,0,, 3
    • 3. Pork chain in Uruguay3.1-StructureThe structure of the porcine meat chain is composed by four links: Primary production Intermediation Industrialization Commercialization 1. Primary productionWithin the primary production are the activities of breeding, rearing and fattening. Theprimary production is held basically by small producers (80%) whereas the medium and bigproducers have a participation of 18% and 2% respectively. The majority of the producingestablishments are located in the south-central area of the country, being the Departments(political division of Uruguay) of major production: Montevideo, Canelones, San Jose, Soriano,Rocha and part of Florida and Lavalleja.Map Nº1 - Pigs (Thousands of heads by Department) - Year 2010 In the last years a change has been registered in the primary production, characterized by the reduction in the number of producers. According to the last porcine survey2, 54% of the establishments surveyed in the census of 2000 abandoned production, remaining only 2.800 establishments. Nevertheless, the existence of pork decreased in minor proportion, determining a major concentration of the production. The number of animals for company changed from 42 in the year 2000 to 70 in 2010. It is important to emphasize that a great percentage of these producers perform farm slaughter, where 50% is sold, 30% is for consumption and 20% is destined to elaborated products.Source: Digital Map. Uruguay XXI2 Direction of Agricultural Statistics – Ministry of Agriculture and Fisheries. Year 2006 4
    • 2. IntermediationThis link connects the actors of the primary phase to those of the industrial phase, composedby intermediaries and fairs. This latter canal is the most used by small producers whospecialize in breeding for later selling their pigs. 3. IndustrializationIncludes the activities of slaughter and elaborated products. There exist diverse cuts of meatand products, the first ones are outlined as fresh cuts, backbone (loin), palette, roast and hamand the second ones can qualify in sausages and not sausages.This phase is composed by slaughterhouses, companies that elaborate products, companiesthat are only dedicated to production - with imported meat or native - and finally companiesthat sell porcine meat.As for the slaughterhouse, in 2010, the 10 authorized companies, registered slaughtering for atotal of 177.104 heads, of which 4 not only slaughter but also elaborate products. More than80% of the total slaughter is concentrated in the above mentioned companies.In reference to the companies dedicated to the elaboration of products, it is observed thatbesides the 4 companies previously mentioned, there exist 15 other companies dedicated tothis production. It is necessary to emphasize, since it was mentioned previously, that many ofthese companies use imported raw material.Table 1 shows the slaughterhouses which elaborate products or not. In the first group, appearsMirnabel S.A with 41.7% of the total slaughter, followed by Ardistar S.A (33.7%). On the otherhand, Arroyal S.A is the most important slaughterhouse which does not elaborate productswith a participation of 10.3%. Table 1- Authorized slaughterhouses - heads slaughtered in 20103 Slaughter houses Number of pork heads % s/total Mirnabel S.A (ex Pigusa) 73.848 41,70% Ardistar S.A (ex cativelli) 59.717 33,70% Arroyal S.A ( Lavalleja – Department Government owned) 18.318 10,30% Rondatel S.A 13.726 7,80% Bordenave Motta, Alejo Eduardo 4.723 2,70% Matadero Los Olivos Soc. Col. 3.412 1,90% La Tablada SRL 2.071 1,20% Luchasol S.A 699 0,40% Matadero Mercedes Ltda 414 0,20% Intendencia Mpal de Artigas 176 0,10% Total 177.104 100% Source: National Meat Institute (INAC)3 Only taken into account slaughterhouses that effectively slaughtered in the year 2010, for this motive the slaughterhouse knownas Suc. Carlos Schneck is not listed. 5
    • Next table shows the companies that elaborated products from pork, with its commercial names. Table 2- Companies that elaborate products Name Commercial name Antic S.A Propios Asur S.A- Entereza- S.A Granja San José C. Cristiani & Hnos S.A Tres Hermanos Elías Gómez Ltda Lito Gómez Est. J. Sarubbi S.A Sarubbi Frig. Centenario S.A Centenario Frig. Picorell S.A Picorell Frig. Ecocarnes S.A Mossel, La Serrana, La Dolfina Granja La Familia Ltda La Familia Kali S.A Kali- La Italiana Nolyser S.A El Ceibo Ottonello Hnos S.A Ottonello Sindon S.A Doña Coca K y K Colonia Suiza KyK Tilvenor S.A Productos Porcinos Fenix Bordenave Motta, Alejo Bordenave Eduardo Matadero Los Olivos Soc. Col. -- Mirnabel S.A -- Ardistar S.A -- Source: Ministry of Industry – “Chains of value III”. 4. CommercializationThe national commercialization is made thru different channels, such as butchers shops andsupermarkets, though in a lesser scale, the direct sale of meat and elaborated products can befound.Likewise, to complete the meat chain, it is necessary to incorporate the inputs and the capitalgoods, like the food based in grains, forages and by products of the lacteal industry, amongothers. The increase of the production of grains in the country has contributed positively tothe development of this chain since 70% of production costs are due to food supply. 6
    • 5. ResearchIn terms of research and development, it´s worth mentioning that Uruguay has, as part of theAgronomic Faculty, belonging to the National State University, a specialized Unit of PorkProducer´s which handles the education , research and extension plans as its main objective inporcine production. In the last years diverse programs and projects of investigation have beendeveloped in areas linked to technology, genetics, quality of products, sanitary status, amongothers.3.2- Supply and demand ProductionThe supply of pork meat showed a recovery in 2010 after the significant fall registered in 2009.2010 finished with a production of meat of 18.397 tons, which meant an increase of 6.4 % withregard to 2009. This increase is due to the major stock of porks-5 % in 2010-and to theconsequent increase of slaughter. Table 3-Stock and slaughter of pig- 2002- Figure 1- Slaughter of pig-Tons and thousands of 2010 heads Thousands of heads Slaughter 1 Tons Stocks (Thousa 25.000 350 Year nds of Thousands (tons of 300 heads) of heads 20.000 meat) 250 15.000 200 2002 255 266 19.565 150 10.000 2003 225 230 16.788 100 5.000 2004 235 261 17.424 50 2005 255 281 19.754 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2006 240 277 20.383 Tons Thousands of heads 2007 245 297 21.057 2008 235 278 20.869 Source: Uruguay XXI based on data from Agricultural 2009 200 237 17.290 Statistical Yearbook 2011- Ministry of Agriculture and 2010 210 250 18.397 Fisheries. Note (1): Includes farm slaughterSource: Agricultural Statistical Yearbook 2011- Ministryof Agriculture and Fisheries 7
    • Internal ConsumptionUruguay has a meat consumption structure that differs from the rest of the world. While in ourcountry, bovine meat is the most consumed (65%) and pork is in third place (with aparticipation of 10%), in the rest of the world pork meat leads the consumption of meat with ashare of 43% in total. Figure 2- Structure of the consumption of meats in the world and in Uruguay - Year 2010 100% 24% 70% 65% 27% Bovine 40% Poultry 43% Suine 20% Ovine 10% 10% 6% 5% World Uruguay -20% Source: Uruguay XXI based on data from FAO e INACHowever, in recent years there´s been a change in the habit of meat consumption in Uruguay,increasing consumer preference for pork meat. In 2003, pork consumption per capita stood at8.3 kilos, while in 2010 this consumption reached nearly 10.7 kilos per capita, determining thatthe growth of pork consumption in 2010 was the largest of all meats (13 %).Of continuing this behavior, it is estimated that in 2011 the consumption will reach 11 kilos percapita. This growth is due to the even greater participation in the share of consumption offresh meat, combined with a major presence in places of commercialization such assupermarkets and butcher´s shops. Table 4- Evolution of the consumption of meats in Uruguay - kg per capita 2006 2007 2008 2009 2010 Bovine meat 51,2 51 54,7 58,2 61,2 Poultry 17,7 14,7 17 19,0 19,0 Suine meat 9,0 9,6 8,6 8,6 9,7 Ovine meat 6,2 6,2 5,7 5,8 4,5 Source: INAC 8
    • Figure 3- Variation of the consumption of meats in Uruguay - % Var Kg per capita 50% 38% 40% 30% 20% 13% 13% 8% 5% 10% 2% 0% 0% -10% Bovine meat Poultry Suine meat Ovine meat -20% -30% -22% Variation % (2006/2005) Variation % (2010/2009) Source: Uruguay XXI based on data from INAC Exports and importsForeign trade of the sector presents a deficit due to the characteristic from which Uruguayimports a high volume of pork meat that is used for domestic output. On the export side, theseare very limited on both, porcine meat and elaborated products, which reflects that theindustrial production takes the internal market as a destination. The imports, on the oppositeside, reach a considerable value (US$ 43 million in 2010), of which 86% are imports of pork.Porcine MeatRegarding exports of pork there was a significant decrease in the period 2006-2010, being theRussian Federation the only destination in 2006 and exports in 2010 reached only 4 tons. It isnecessary to emphasize that last year´s exports correspond only to Rondatel S.A. and its solecountry of destination was Equatorial Guinea, country that registers purchases in every year ofthe period. On the other hand, in 2011 there were not registered exports of this item.Import values registered an upward trend in the period 2006-2010, presenting an averageannual growth rate of 28%. It should be noted that imports in 2011, overcame the registeredones in the closed year 2010 - both in value and in volume. Brazil is the principal importer,representing 88% of the total of the volume imported, followed by Chile (5 %) andDenmark (4 %).The main importers are Centenario SA (19%), Sindon SA (18%), Wilisol (12%) and Carlos Shneck(9%) together representing 58 % of total tons imported in 2011. 9
    • Table 5-Export and import of porcine meat –US$ and Tons Export Import Year US$ Tons US$ Tons 2006 1.171.360 652 13.941.975 7.796 2007 590.812 378 18.195.750 10.079 2008 21.234 6 25.469.383 9.451 2009 31.122 8 25.311.013 11.278 2010 17.887 4 37.524.740 13.340 2011 0 0 51.392.550 17.093 Source: Uruguay XXI based on data from National Customs AdministrationPork productsThe exports of products derived from the porcine industry are very scanty and consist of thefollowing products: prosciutto, hams and shoulders.As shown in the table below, excluding the exports of raw ham – which were continued from2006- the other products were exported in punctual years. The exports of raw ham correspondto a sole company, ÑANDUGUAY S.R.L., whose destination is Brazil. Other products weredestined to Brazil and United States. Table 6-Export of pork products- Data in US$ and Tons 2008 2009 2010 2011 Products US$ Kilos US$ Kilos US$ Kilos US$ Kilos Raw ham 3.360 200 7.650 500 6.360 400 6.360 400 Others Hams 0 0 0 0 0 0 0 0Shoulders andcut thereof of 0 0 25.197 3.600 0 0 0 0 swine Total 3.360 200 32.847 4.100 6.360 400 6.360 400 Source: Uruguay XXI based on data from National Customs AdministrationRegarding the imports, it is highlighted the high value of imports of pork fat. This product isused as raw material in the processing industries. In 2010, the imports of fat contributed inmore than half of the value of derivate products, reaching US$ 3,6 millions. The first origin ofthese imports is Chile, representing 50% of total imports, followed by Denmark (23%).Other products of the processing industries imported by Uruguay are “Shoulders and cutthereof of swine” and “ham”, which together represent 16% of the total amount of imports.Likewise meat, Brazil is the main origin of these imports, being SADIA the companyresponsible. 10
    • Table 7- Imports of the processing industries and derivates - Data in US$ and Tons 2008 2009 2010 2011 US$ miles Ton US$ miles Ton US$ miles Ton US$ miles TonPork Fats 3.635 2.928 3.061 3.134 3.633 5.872 4.078 3.413Shoulders and cut thereof 854 464 692 436 936 552 1.192 535Raw ham 807 96 884 114 990 122 1.343 131Hams and cuts thereof 751 291 771 315 717 296 1185 391 Total 6.048 3.780 5.408 3.999 6.276 6.841 7.798 4.470 Source: Uruguay XXI based on data from National Customs Administration InvestmentSince 2007, with the approval of Decree Nº 455, which regulates Chapter III of the Law of thePromotion and Protection of Investments (Law Nº 16.906), there have been approved a widerange of sector projects, totaling US$ 3.07 million. These investmentsare mainly concentrated in the industrialization and sale of pork products. 4. The global market and commercial opportunitiesWorld production of pork meat totalized a volume of 102.7 million tons in 2010 and isexpected to reach a record level by 2012. This growth is due mainly to the recovery of SouthKorea and China. China is the largest producer, accounting for 50% of the totalvolume followed by the European Union (22%) and Brazil (3%).In terms of consumption, during the past 11 years, world consumption grew steadily exceptfor 2007, the year in which it fell 1.4% due to the fall in the demand of China by7.4%. Consumption in 2010 totalized 102.5 million tons of meat, a slight increase isestimated for 2012. Again, the main consumers are China, European Union, Brazil and it shouldbe added the United States which ranks as the third largest consumer of pork.In the region, consumption is also increasing, with Brazil and Mexico the largest consumers,followed by Chile and Argentina. Figure 4 - Major consumers of pork - Year 2010 11
    • Vietnam Russian 2% Mexico Federation Japan 2% Others 3% 2% 10% Brazik 3% USA 8% EU China 20% 50% Source: Uruguay XXI based on data from USDA-FASWhile pork is the most produced meat in the world, exceeding production of poultry meat (77million tons) and beef (57 million tons), it is not the most widely traded. In 2010 the tonnageexported was 6 million and the tonnage imported was 5,8 million, implying that only 6% of theproduction was traded.Regarding exports, the United States is the largest exporter followed by the European Union,Canada and Brazil. It is estimated that by 2012, United States exports will rise and EuropeanUnion exports will decline, reaching a volume of 2.3 million and 1.9 million tonsrespectively. Regarding imports, the major importers are Japan (19.3%), Russian Federation(14.8%), Mexico (10.1%) and South Korea (10%). Figure 5 – Main importers of pork meat - Data in millions of tons Millons of Tons 1,4 1,2 1,2 2011* 2012* 1,2 0,9 1,0 0,8 0,7 0,6 0,6 0,7 0,6 0,6 0,5 0,6 0,4 0,4 0,4 0,4 0,4 0,2 0,2 0,2 0,2 0,2 0,0 Source: Uruguay XXI based on data from USDA-FAS. Note (*): forecasted figures. 12
    • Global Perspectives4 Global consumption of meat, 1996-2014 Millions of TonsFor 2014 it isexpected a moderate growth, 200consumption, production 180and world trade in meat, resulting 160 140in a dynamic market. According to 120FAOs strong economic growth 100in developing countries in 80conjunction 60with consumer preference for 40foods with higher protein 20content will lead to increased 0consumption of meat. Thisgrowth will be driven byincreased production of pork and Bovine meat Pork Poultry Ovine meatpoultry in developing countries. Source: FAO4 Source: agricultural perspectives, OCDE-FAO, 2005-2014, http://www.fao.org/docrep/008/y9492s/y9492s00.htm 13