São Paulo – After a eight-year spell as the leading importer of poultry from Brazil, Saudi Arabia was outdone by China, as a result of an undersupply in Asian countries caused by a swine disease outbreak. Saudi imports from Brazil amounted to 429,000 tons through November 2019, down 1% from a year ago. China imported 513,000 tons, up 28%.
The fourth biggest importer of poultry items from Brazil was the UAE at 316,000 tons, up 12%, with the country en route to become a distribution hub for the Gulf area. Brazil’s BRF, the parent company for brands Sadia and Perdigão, owns a plant in Abu Dhabi, UAE. Kuwait ranked ninth with imports down 7% to 104,000 tons.
Exports to the Middle East as a whole, however, went from 33.2% of total sales through November 2018 to 34.5% through November this year. Asia’s share increased further, from 34.3% to 37.2%.
During a press conference this Thursday (12), Brazilian Animal Protein Association (ABPA) chairman Francisco Turra said Asia’s 37% market share is “a giant step” for Brazil.
“Saudi Arabia led poultry exports for eight years straight. This year saw it lose space to China, the runaway leader. The new fact for us was this very aggressive move by China, which so far has taken in 14% of our exports year-to-date. Saudi Arabia’s imports decreased somewhat. They had a bit of a scare early into the year as they visited plants, created problems and claimed they were manufacturing domestically, but when they found that China was buying massive amounts, they came in strong and tried, but lost, because besides buying in big quantities, China paid well,” he explained. However, BRF said in late October that it also plans on opening a plant in Saudi Arabia.
The Arab market
ABPA Markets director and chairman-to-be – his term begins in April 2020 – Ricardo Santin (pictured, on the microphone) said Brazil remains the world’s biggest producer and exporter of halal meat – i.e. meat fit for consumption by Muslims. “Our market position is still comfortable. You have Saudi Arabia, whose imports declined earlier on but are stabilizing. This year they decreased by only 4,000 tons, so you no longer have a reduction you had in the past in the number of plants allowed to sell. This goes to show that the halal market is stable and that it can grow,” he said.
But Arab countries will likely experience repercussions from the crisis in China, because some of the product that usually ships to the Middle East might ship to China instead. “For example, China began to buy chicken breast, which it had never done before. They began in October, and that chicken breast is going to come from markets that used to supply Mexico, Europe and the Middle East. These markets might see a decline in supplies, which their domestic industries may cover, or else there might not be enough product to go around,” said Santin.
According to the director, the Arab market remains the biggest destination for Brazilian poultry. “And it will remain thus. Of course, the whole disruption which China is causing in every market around the world means the halal market will also be impacted. If China begins buying whole chickens, for instance, there’ll be consequences to that. It’s too early to tell, but [relations with Arab countries) are still vital to us. The halal market is still one of Brazil’s biggest clients,” he said.
Some of the poultry products that used to ship to Saudi Arabia up until 2018 is now shipping to other markets, like thet UAE, Yemen, Qatar, Iraq, Oman and Bahrain, as well as less relevant markets like Afghanistan, whose imports have doubled this year according to the ABPA.
Forecasts
Turra expects sales to the Arab market to remain flat and possibly increase in 2020. “We haven’t made any estimates, but it’s a that’s already loyalized,” he said.
according to Santin, the association hasn’t made projections regarding importing countries next year, but the bloc of 22 Arab countries remains Brazil’s biggest client apart from the domestic market. “We’d like to see sales [to Arab countries] increase along with global consumption and the shift in consumption that the crisis in Asia will bring about, but we’re working under the assumption that sales will at least remain level. If China starts buying more and more, that will not take away from the relevance of Arab countries. Look, China has a long way to go before it starts buying equal amounts of halal meat,” he said.
Overall numbers
Poultry exports from Brazil year-to-date through November were up 2% to 3.822 million tons shipped. Revenue was up 6.1% to USD 6.358 billion. Whole-year sales are expected to 4.2 million tons, up 2.4% from 2018.
Poultry production is seen going up 2.3% to 13.15 million tons this year, with per capita consumption expected to climb 2.2% to 42.6 kg.
Eggs
Egg exports from Brazil are expected to be down 30% to 8,000 tons as a result of rising domestic consumption. “There’s not much left to export,” said Turra. The UAE are the biggest importer of Brazilian eggs. Through November, the country took in 4,046 tons, down 28% from a year ago. Bahrain ranked sixth at 236 tons, up 32%, and Saudi Arabia was seventh at 220 tons, down 43%.
Poultry genetics
Hatching egg exports were down 13% in volume and 8.5% in revenue year-on-year through November, to 11,960 tons and USD 51.72 million. Day-old chick exports slid 5.4% in volume to 953 tons, while revenue was up 7.6% to USD 74.81 million. The biggest markets for Brazilian poultry genetics were Senegal and Paraguay. Saudi Arabia came in third at 2,004 tons imported, up 1% year-on-year. The UAE ranked fifth, with imports down 24% to 1,439 tons.
Translated by Gabriel Pomerancblum
