February 22, 2007

Sharp rise in Brazilian poultry production expected

A sharp rise in poultry production in Brazil is expected that would lead to major export opportunities, market analysts said.

Factors leading to firm domestic demand include economic growth, lower inflation, a drop in unemployment and higher income. On the export front a rebound of exports as the markets recover after last year's bird flu is also expected to spur production. However, one of Brazil¡¯s major export markets, the EU, has decreased imports due to a dramatic drop in consumption.

Limiting factors such as appreciation of the Brazilian currency relative to the US dollar and higher corn and soybean prices may put a damper on higher growth.

The threat of bird flu still lingers. Although Brazil is free of bird flu, it is in the path of migratory birds, believed to be the main source of bird flu.

Brazil surprised everyone, including itself, by exporting around 100,000 tonnes more chicken in the first quarter of this year than in the same period of 2004, an increase of 18.3 percent. Preliminary figures for the second quarter indicate a similar trend.