Brazilian MDM exports struggle amid weak overseas demand

Brazilian exporters are facing a challenging market for mechanically deboned meat (MDM), as prices in several destination markets have remained unattractive and, in many cases, fail to cover export costs, according to multiple market sources.

As overseas sales have lost appeal, part of the production has been redirected to the domestic market, while some market participants have reported atypical destinations for the product to reduce supply and support margins.

Export market under pressure

Brazilian market participants reported growing difficulties placing MDM in export markets over the last two months. According to a Brazilian exporter, prices to West African countries, the main destinations for Brazilian MDM, were around $450/mt CFR, a level considered unworkable for shipments.

"Freight to the region alone exceeds $280/mt," the exporter said, adding that under these conditions, the resulting FOB/FCA prices did not justify exporting the product.

In the Philippines, another key destination for Brazilian MDM, buying interest also remained below expectations. A Brazil-based trader said bids were around $400/mt, a level that does not justify export operations.

The trader attributed the weak price environment to elevated inventories and port congestion. According to the source, multiple containers loaded with MDM have remained at the Port of Manila for several months, and their eventual clearance is expected to further increase product availability in the market.

"I am not shipping any MDM cargoes to the Philippines," the trader said, adding that reduced trading activity has persisted for about two months.

Meanwhile, market participants have been looking for opportunities to place volumes across the Americas. Another Brazil-based trader said sales to Argentina were under negotiation at around $450/mt, broadly in line with price levels observed in other markets. The source said shorter shipping distances could support trade.

"We are looking for diversification," the trader said.

Another Brazilian exporter said shipments to Cuba, traditionally one of the key destinations for Brazilian MDM exports, remained limited. The source said no new exports had been concluded since the market reopened in June after being closed due to customs-related issues. Cuban buyers have also reported challenges linked to electricity shortages, which have constrained trading activity.

Data from Brazil's foreign trade agency (Secex) show that the country exported 409,065 mt of MDM between January and August 2026, up 34% from the same period in 2025. The increase largely reflected a weaker comparison base, after countries including South Africa and the Philippines temporarily suspended imports of Brazilian poultry products in 2025 following avian influenza outbreaks.

August exports totaled 42,700 mt, down 12.5% from June, according to Secex. Market participants expect September export volumes to decline further.

Domestic market absorbs supply

Faced with weaker export opportunities, Brazilian packers have retained MDM volumes as raw material for their own industrial operations, reducing dependence on export channels.

An industry participant said a significant share of MDM production in recent months had been directed to processed and breaded products destined for the Brazilian domestic market, where demand has helped absorb volumes.

However, market participants said part of the product is currently being redirected to poultry meal production and rendering plants, a destination considered atypical for the product.

"It is a shame to send the product to a rendering plant," another industry participant said, adding that the movement reflects efforts to reduce oversupply of processed products in the domestic market and prevent further pressure on prices.