February 16, 2007

Brazil may benefit as poultry industry faces tough times

Brazil's poultry industry may emerge unscathed as the world poultry industry faces a double-whammy as bird flu and higher corn prices vaporize profits.  

The US corn price increase of the last few weeks could cost the industry US$12 billion worldwide, which will in turn be passed on to consumers in the form of higher prices, analysts said.

However, bird flu would turn out to be a blessing in disguise for Brazil's poultry meat industry, a Thai analyst said.

The poultry industry in countries affected badly by bird flu, such as Egypt, would take at least a year to recover after the disease has been eradicated, Gordon Butland, president of Thai-based Global Poultry Strategies said.

Although prices may not return to 2005 levels, it would certainly be improved on 2006 levels, he said.

Butland added that Brazilian poultry integrator Sadia's 2006 profits demonstrated the solid finances of the large companies. However, despite stable growth, the years in which Brazil's chicken exports grow at dizzying rates are probably over and would never happen again, he said.