SAO PAULO, Sept 29 BRF SA, the
world's largest poultry exporter, said it would apply a 5
percent discount to most of its purchases in Brazil, where a
recession and rising grain prices are reducing profitability.
In a Thursday statement sent to Reuters, the Brazilian
company said the discount would be effective throughout the
fourth quarter to "maintain the business sustainable in the face
of the country's ongoing macroeconomic challenges."
The company derives about half of its annual revenue from
It informed suppliers of the decision in a recent memo,
Bloomberg News reported on Wednesday.
BRF, whose processed food brands in Brazil include Sadia and
Perdigão, reported a 92 percent drop in second-quarter net
income after soaring corn prices hit its poultry and pork
The company's shares were down 0.8 percent at 54.71 reais in
early afternoon trading in São Paulo. The stock is up 1.4
percent this year, well below the benchmark Bovespa stock
index's 36 percent gain.
BRF recently told Reuters it started to make forward corn
purchases, bucking a multiyear strategy, to lock in supplies
during a shortage linked to a surge in exports.
Corn prices measured by a regional index presented by market
research group Cepea/Esalq CORN-CAMP-BRL fell recently from
all-time highs in June, although they remain well above
(Reporting by Marcelo Teixeira; Editing by Guillermo
Parra-Bernal and Lisa Von Ahn)