Decline in China hog production boosts global pork trade

The world’s largest meatpacker says its profits will be higher

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ReutersJBS SA, the world’s largest meatpacker, is poised to reap the benefits from additional demand after an outbreak of African swine fever in China reduced pork output.

In the first four months of the year, its Australian unit’s beef sales to China soared by 80 per cent, JBS executives said earlier in May during a conference call about first-quarter results.

“In Brazil, we are already seeing a rise in pork exports, both in terms of volume and price,” Chief Executive Officer Gilberto Tomazoni told analysts.

Executives said they expect sales of all proteins, not just pork, to increase due to the deadly hog virus.

The recent outbreak of the disease in China will boost the company’s cash-flow generation in the coming quarters, Itaú BBA analysts wrote in a note to clients.

Itaú believes the hog disease could lead JBS to generate earnings before interest, taxes, depreciation and amortization, a measure of operating income known as EBITDA, of as much as 21 billion reais ($5.3 billion) in 2020.

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