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Brazilian poultry industry on the rise

Signs are growing that the Brazilian poultry sector is coming out of the doldrums as it begins to win back some of its lost export market.

Brazilian food processor BRF SA, announced a 191 million reais (US$48.74 million gain) in Q2 results, swinging back to profit after 3 quarterly losses.

Reopening of plant

The company, which is the world’s largest chicken exporter, said adjusted earnings before interest, taxes, depreciation and amortization, was 1.547 billion reais – nearly double the average analyst estimate. BRF SA announced this week that it will reopen a plant in the southern town of Carambei, which predominantly exports chicken to Middle East markets, particularly Saudi Arabia. The plant had been closed for a number of months in an effort to balance supply and demand. News agency Reuters reported that BRF SA chief executive Lorival Luz said the plant would reopen ahead of schedule, as an improved operating environment had boosted the company’s balance sheet and outlook.

Rise in chicken meat exports

The Brazilian Association of Animal Protein (ABPA) announced this week that Brazilian chicken meat exports for the first 6 months of the year rose in volume and value compared to the same period in 2018. ABPA said fresh and processed exports were 2.433m tonnes, up 5.8% year-on-year. In value terms, the sector’s sales rose 10/8% in 2019 with total revenue of US$4bn compared to $3.675bn in the same period last year. Ricardo Santin, APBA’s executive director, said there had been a real surge in demand for Brazilian poultry: “The international market is hot, and prices are rising. Again, we recorded average values above US$1,700 per ton.” The average price in 2018 was US$1,600 per ton.

China is a key market and Brazil is currently awaiting a decision by Beijing regarding export permits for 9 chicken factories.