São Paulo – Poultry exports from Brazil to Arab countries keep sliding, mostly as a result of changes in halal slaughter rules. Year-to-date through November, sales to the region slightly exceeded US 2 billion at 1.3 million tons shipped – which amounts to 19.1% of total industry exports. Year-on-year, revenues were down 18.95% and shipped volume was down 13.5%, according to numbers from the Arab Brazilian Chamber of Commerce.
Nevertheless, Saudi Arabia remained the number one destination, followed by China, Japan, South Africa, the UAE, the EU, Hong Kong, Kuwait, Mexico and South Korea, the Brazilian Animal Protein Association (ABPA) reported this Thursday (13).
From January to November, Saudi Arabia imported 434,000 tons (12% of total exports from Brazil), down 20% from a year ago; the UAE imported 282,000 tons (8% of total exports), up 3% year-on-year; and Kuwait, imported 111,000 tons (3% of total exports), up 5%.
The ABPA said poultry production should be down 1.7% to 12.82% million tons by the end of this year. Whole-year exports are expected to reach 4.1 million tons, down 4.9% from 2017. Through November, shipped volume was down 6.3% from a year ago to 3.748 million tons. Revenue from poultry exports came out to USD 5.99 billion, down 10.8%.
One of the reasons poultry exports dropped, according to the ABPA, was a change in criteria for halal slaughter – i.e. slaughter complying with the rules of Islamic religion – in Saudi Arabia. This led to 100,000 tons less being shipped from Brazil. Saudi Arabia was one of the markets to which sales decreased the most this year.
ABPA CEO Ricardo Santin (pictured, 2nd from left to right) said he expects sales to Saudi Arabia, his biggest client, to bounce back in 2019. “And this year we found a new Islamic, non-Arab market: Pakistan, which we’ve shipped over 1,300 tons to. Islamic countries will remain our biggest market,” Santin said during a press conference in São Paulo.
The CEO said exports to Egypt also dropped. The Arab country imported USD 64.17 million worth of poultry from Brazil from January to November, down 71% from a year ago, with 50,170 tons shipped, down 68.6%. “It was a local decision. The country had a few sanitation issues which caused them to buy more chicken from Brazil. Now, they’re resuming their domestic production,” Santin explained.
Another issue taking away from exports was a trucker strike in Brazil in late May and early July. It caused over BRL 3 billion in losses, only BRL 1.5 billion of which were recovered. In the wake of the strike, government-controlled freight prices were put in place, causing transportation costs to increase by 35% on average. Maize and soy bran prices were also up 50% and 40%, and those items are used as poultry feed. On the other hand, the US dollar gained on Brazil’s real, which was advantageous to exports from Brazil in the second half of the year.
Years to come
The outlook is good regarding 2019, said ABPA chairman Francisco Turra (pictured, 2nd from right to left). He expects output to be 1.39% bigger than this year, to 13.2 million tons. The ABPA also announced a plan to export 500,000 tons of poultry and pork on average per month by 2020.
In late November, the association presented poultry and pork industry demands to the transition team for the incoming administration, which will be inaugurated on January 1st. They called for reduced paperwork requirements in clearance of packing plants and the adoption of new technologies, an end to minimum freight fees, improvements in logistics infrastructure, improvements in road safety and prevention against cargo robbery, and new international agreements, especially with the European Union.
Embassy
Regarding the moving of Brazil’s Embassy in Israel from Tel-Aviv to Jerusalem, which president-elect Jair Bolsonaro has contemplated, Turra said he has been discussing the issue with other organizations. He has also been to Brasília to speak with Agriculture minister-to-be Tereza Cristina. “We spent a whole day in Brasília saying ‘Tereza Cristina, don’t allow this to happen, don’t allow this to happen. We want our relations to be natural. If he (Jair Bolsonaro) has the political intent of moving the Embassy to Jerusalem, he can open a consulate or a cultural center (instead). There’s no problem with that. What he can’t do is jeopardize our relations.’ That would cause a problem. I don’t know how big of a problem, because Islamic countries won’t be able to find someone to meet their demand, especially when it comes to poultry, which they have been buying from Brazil for many years now,” Turra said. “The government needs to help. And help doesn’t mean giving us money. Sometimes it means not getting in the way. It means hiring inspectors, providing tools for the Ministry [of Agriculture] to do its work,” he said. There are fears that the president-elect’s planned Embassy move might impact Brazil’s ties with Arab and Muslim countries.
Eggs
Egg exports from Brazil keep going strong. This year, over 44.5 billion units should be produced in the country, up 11.4% from 2017. Exports are expected to end the year at 10,900 tons, up 80%. Domestic per capita consumption is seen ending the year at 212 units per inhabitant, up 10.6% from 2017.
The leading buyers of eggs from Brazil were the UAE, Japan, South Africa, Cuba, Saudi Arabia, Uruguay, Gambia, Bahrain, Equatorial Guinea and Chile.
Year-to-date through November, the UAE imported 5,600 tons of eggs from Brazil. The amount was 56.3% of total exports and up 94% from a year ago. Saudi Arabia imported 388 tons, up 187%, and Bahrain bought 179 tons – it hadn’t imported any eggs from Brazil in 2017.
Total exports through November reached 9,900 tons, up 84% year-on-year and fetching USD 15.1 million, up nearly 102%.
Genetic material
Exports of genetic poultry material increased by over 24% through November to 13,740 tons, fetching USD 56.5 million, up 24.6%. The ABPA said the year is expected to end with USD 60 million and 15,000 tons of hatching eggs exported.
Day-old chick exports were up 28.3% in volume to slightly over 1,000 tons year-to-date through November, with revenue going up 7.2% to USD 69.5 million. The leading destinations were Senegal, Paraguay, Mexico, Saudi Arabia, the UAE, Zimbabwe, Peru, Venezuela, Colombia and Ecuador.
Saudi Arabia was the 4th biggest importer at 1,979 tons of genetic material (hatching eggs and day-old chicks) from January to November, up 52% from a year ago. The UAE were the 5th biggest importer at 1,900 tons, down 3%.
“There is confidence in our country and our sanitary surveillance. We never had a case of avian flu. We could be a major global supplier of genetic poultry material, and we are playing a key role in global poultry production. Brazil takes the stance of a partner. We’re not just looking to sell meat; we want to help other countries’ industries,” said Santin.
Translated by Gabriel Pomerancblum
