Poultry could help address Brazil’s economic woes

16-Sep-2015 - Last updated on 17-Sep-2015 at 18:14 GMT

Broiler production is one of the few good news stories associated with Brazil's economy

Poultry exports could help halt Brazil’s economic slump, experts have claimed, as its gross domestic product (GDP) looks set to sink by more than 2% this year.

For this year, poultry exports are expected to jump at least 5%. Next year, they could grow 4%, even if South America’s largest economy’s GDP stagnates, with a predicted 0% rise in GDP during 2016 – a levelling out of a recession that may actually be worsened by political instability.

With a 15% market share, Brazil is the world’s third-largest global producer of poultry - after China and the US. It is, however, the biggest exporter with a 38% global market share according to the Brazilian Association of Beef Exporters (ABEIC). In July, Brazil exported a record 400,000 tonnes (t) of poultry in whole chicken and cuts, salted, processed and cured meats.

Factors behind this included a 60% fall in the value of the Brazilian Real (BRL) and the entry of Brazilian products into new markets. With the government mired in a corruption scandal and constitutional crisis, this currency decline could be maintained, while the second is explained by sanitary restrictions imposed by importers over US bird flu outbreaks.

US poultry exports

The Brazil Animal Protein Association (ABPA - Associação Brasileira de Proteína Animal) predicts that Brazilian poultry exports should reach 4.3mt by the end of this year (2015), a new record. Before the issue with American products, ABPA president Franscisco Turra expected trade with foreign buyers to advance 3% this year. But US poultry exports fell 8.5% from January to May according to the US Department of Agriculture (USDA), which is predicting a similar fall for all of 2015. “That makes Brazilian products to be a great replacement for those goods,” he told GlobalMeatNews.

Since broiler production is one of the few good news stories within the Brazilian economy, Brazil’s vice president Michel Temer and five ministers went to trade fair World Food Moscow to lure more customers. Russia itself is one of those markets where more growth is expected, thanks to sanctions imposed by Western powers and Russia’s retaliatory ban on meat imports from Europe, the US and other countries opposed to Moscow’s Ukraine policies.

The Brazilian government says 158 countries import its poultry products - with the recent addition of Malaysia and Myanmar. Saudi Arabia is the main destination for Brazil’s products.

Oil crisis

According to Antonio Jorge Camardelli, president of ABIEC, “Despite the international scene, with an oil crisis and intense exchange rate variations hitting various exporters in Brazil, we keep Russia as one of our main trade partners [alongside China and South Africa].

“We have come to the fair so we can have an even broader relationship with our importers, so we can talk about our sector and have a better perspective for the following months,” he added.

In July, the Organisation for Economic Cooperation & Development (OECD) and the UN’s Food & Agriculture Organisation (FAO) published their Agricultural Outlook 2015-2024 report and stated that: “Brazil is poised to become the foremost supplier in meeting additional global demand for poultry, mostly originating from Asia.”

The document also said the country should be the top beef and poultry exporter by 2024, with export shares of 20% and 31% respectively.