With many of its competitors unable to access export markets due to disease or war, Brazil, the world’s largest poultry meat exporter, is continuing to chalk up successes, seeing the value of its exports surge during the first quarter of 2022.
At over US$2.05 billion, Brazil’s poultry meat exports during the first quarter were almost a third higher when compared to the first quarter of 2021, reports industry body the Brazilian Association of Animal Protein (ABPA).
While higher prices will have contributed to this increase, sales volumes were still a respectable 10.2% higher at a little over 1.14 million metric tons (MT), when compared to the same period last year.
Favorable market for well-positioned exporters
A number of factors are contributing to the industry’s strong export performance this year. Brazil started 2022 having achieved a record performance in overseas markets last year, with volumes shipped 9% higher.
International markets for chicken meat are tight, with international suppliers variously affected by disease, labor difficulties or war.
The U.S. is currently experiencing its worst outbreak of avian influenza since 2015 while, in Europe, France is suffering its worst outbreak ever. Ukraine, which achieved record poultry meat exports last year, primarily supplying former Soviet countries, the Middle East and Europe, has, for obvious reasons, ceased to operate in global markets.
Where others are unable to export, Brazil is stepping in, with the country recently announcing a number of new contracts in the Middle East, for example.
Commenting with particular reference to the war in Ukraine, Luis Rua, ABPA Markets Director, said: “With the conflict in Eastern Europe, Brazil is being ever more called upon to strengthen its position as the main exporter of chicken meat in the world.”
As the first quarter of this year drew to a close the industry recorded monthly income of US$771.1 million for the month of March. By volume, March’s sales were up by 5.7% compared to the year before, building on February’s increase of 7.4% and January’s 19.7% rise.
The final month of the quarter saw China return to being the main destination for Brazilian chicken meat exports, the country taking 60,300 MT of chicken meat, an increase of 9.4% compared to March 2021. Japan was the second most important destination for the month, followed by the United Arab Emirates.
Input, price inflation
Brazil’s record-breaking revenue for the first quarter of this year was only partly attributable to higher volume sales – Brazilian product is becoming more expensive.
Like others around the world, the Brazilian industry is suffering from higher input costs, and this is forcing up the price of Brazilian chicken in international markets. In January alone, for example, the average price of Brazilian chicken meat exports rose by 18.6%.
Commenting in early February, Ricardo Santin, ABPA President, noted that this increase would help to offset the rising costs of corn and soya, amongst others.
Production costs are thought to have risen by 10.5% over the first three months of this year, continuing the trend witnessed last year. Producer margins are being increasingly squeezed, but there may now be, at least some, light at the end of the tunnel.
In late April, the economic research center at the University of Sao Paulo’s College of Agriculture (CEPEA) noted that corn and soybean prices were experiencing downward pressure, and that the purchasing power of the poultry industry was improving. It continued that firm demand both at home and from overseas was pushing up prices for live chicken, noting that the price paid for Brazilian chicken was 21.6% higher in March this year, compared to a year earlier.
The importance of Brazilian halal exports
Brazil is not only the world’s biggest chicken meat exporter. It is also the largest exporter of halal chicken meat in the world.
The country first started to export chicken meat in 1975 and, ABPA notes, its first clients were in the Islamic world. There are now 58 countries that import halal chicken meat from Brazil and, combined, they absorb almost half the country’s chicken meat exports by volume.
Sales to these countries reached US$3 billion last year and look set to continue rising. January and February saw sales to this group of countries rise by 25%, compared to the first two months of last year, worth US$509.7 million.
ABPA notes trade negotiations held at food and beverage trade show Gulfood, held in Dubai in late February where discussions suggested that exports would increase by US$1 billion over the coming years.
Brazilian poultry output to beat previous forecasts
