Saudi Arabia imposes restrictions on Brazilian chicken imports

Without explanation, Saudi Arabian authorities abruptly announced a ban on imports of poultry meat from 11 processing plants in Brazil.

(BENGUHAN | Bigstock)
(BENGUHAN | Bigstock)

Without explanation, Saudi Arabian authorities abruptly announced a ban on imports of poultry meat from 11 processing plants in Brazil.

Among the affected facilities are seven operated by JBS SA, reports Arabian Business. The company did not confirm the details, but this source identifies plants in Passo Fundo and Caxias do Sul in Rio Grande do Sul, and Campo Mourao in Parana state. BRF SA said none of its plants will be impacted.

Without prior discussion with the companies involved or explanation, the changes were announced last week by food and drug authority of the Kingdom of Saudi Arabia. The restrictions are scheduled to take effect from May 23.

Brazil reacts to the suspension announcement

In a statement, the government of Brazil said it received news of the decision by Saudi Arabia “with surprise and dismay.” According to the Ministry of Foreign Affairs and the Ministry of Agriculture, there had been no advance warning about the announcement. 

These agencies are also unaware of any justification to support the suspension of the 11 plants for exporting to Saudi Arabia. They stressed the high standards applied to quality and health throughout the Brazilian supply chain, and rigorous veterinary inspections.

Brazil’s government said it would consider taking the case to the World Trade Organization if no clarification is offered by Saudi Arabia.

Supporting the government’s search for an explanation is the Brazilian Association of Animal Protein (ABPA). The association confirmed its commitment to supplying food to the Kingdom’s people, and to its confidence in Brazilian companies regarding the technical criteria and quality of its exported products.

Brazilian poultry exports to the Kingdom in perspective

Just three months ago, it was forecast that Brazil was projected to export a record volume of poultry meat this year. 

If Saudi Arabia carries out its policy to reduce the number of Brazilian plants from which it will accept poultry imports, the impact on the ambitions for the Latin American country’s poultry industry could be significant. 

In 2020, Brazil exported 4.321 million metric tons of poultry meat, according to the latest annual report from the ABPA. Of this total, almost 40% was shipped to Asia, and 32% to the Middle East. Behind China, Saudi Arabia was the second most important destination for Brazilian chicken for the past two years. In 2019 and 2020, the Kingdom received volumes of around 468,800 metric tons (mt) and 467,500mt, respectively. Last year, this volume represented 11.3% of total Brazilian poultry meat exports. 

According to the same source, the Kingdom was the world’s fifth largest importer of poultry meat. In 2020, Saudi Arabia imported 550,000mt of these products. 

News of the suspension of some plants from exporting to Saudi Arabia comes at a bad time for Brazil. Feed prices are rising sharply there, reports Arabian Business, while the coronavirus (COVID-19) pandemic has reduced domestic demand.   

Saudi Arabian policy of raising food self-sufficiency

For some time, Arab nations have been trying to reduce reliance on imports of meat, reported Reuters on the latest plant suspensions, while stimulating domestic production. 

In the past week, Arab News has reported that Almarai is significantly expanding its poultry production. The Saudi food giant plans to double its share of the chicken market over the coming five years. Investments totaling 6.6 billion riyal (SAR; US$1.76 million) will be funded through internally generated cash flows.

Expansion will be focused on different locations in the Kingdom, to enhance biosecurity at poultry farms, and to distribute the company’s contributions to economic development, according to Almarai.

In September of 2020, the USDA Foreign Agricultural Service (FAS) reported that Saudi Arabia had already surpassed its initial goal of 60% self-sufficiency in chicken meat. Output last year was estimated to be 930,000mt, and 950,000mt was the forecast for 2021. Meanwhile, the Kingdom’s imports were expected to rise to 625,000mt this year from 550,000mt last year. 

For some time, cooperation has been ongoing between the Saudi Ministry of Environment, Water and Agriculture, and the nation’s poultry producers to reduce dependence on imports. FAS reports that the new target is for Saudi Arabia to achieve 80% self-sufficiency in chicken by 2025. 

Determination to achieve this goal may lie behind the Saudi authorities’ recent suspension of approval for some Brazilian plants to export to the Kingdom. 

In January, JBS’s rival BRF announced its acquisition of a Saudi food company. From its one plant, Joody al Sharqiya manufactures meat products, such as hamburgers, and marinated and breaded cuts. At the time, BRF reported its intention to invest in the plant to increase output.

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