January 31, 2007

Brazil betting on US poultry market as insurance against EU quotas

The US is a long-term insurance for Brazil's poultry industry against EU restrictions, Ricardo Gonçalves the president of the Brazilian Chicken Exporters' Association (Abef) said Monday (Jan 23).

At present, the EU buys 87 percent of the processed chicken that Brazil exports.

Total processed chicken exports in 2006 totaled 127,245 tonnes, up 51.5 percent  on 2005 with revenue growing 52.3 percent to US$280 million.

The new EU quotas would limit Brazil's processed chicken exports to 73,000 tonnes compared to 113,000 tonnes before.

At the end of 2006, the EU established that Brazil can export 336,107 tonnes of frozen, chilled and processed chicken and turkey, paying 8.5 percent to 15.4 percent tariffs.

Volumes exceeding this quota will pay EUR 1,024 to EUR1,300 per tonne extra.

If the quotas remains as it is, Brazil's exports would exceed this level in early 2008, thus making it imperative that Brazil finds alternative markets.

Gonçalves said Brazil would seek to negotiate with the US to export processed chicken products such as nuggets and burgers. After this, negotiations will begin for fresh and frozen chicken exports.

Negotiations would take place in stages and it is going to be a slog because Brazil and the US do not have a poultry sanitation equivalence agreement, he pointed out.