February 27, 2012

Brazilian poultry production rises

Despite revised downward broiler production estimates for 2012 to 13.3 million tonnes, Brazil is about to set a new record of 3% increase for poultry production which is mostly driven by domestic demand and a small recovery in exports.

In addition, the production growth has slowed due to an overvalued Brazilian currency and restrictions from trade partners. Another important factor is a slowdown in the rate of growth of domestic consumption combined with higher costs of production due to higher corn prices.

Domestic consumption of broiler meat in 2012 is projected to increase by 3% to 9.9 million tonnes, which is below the initial forecast of 10.1 million tonnes. The growth in exports in 2012 is likely to be driven by higher sales of whole broilers in general, and chicken parts, in particular, to China and Hong Kong. Trade sources also expect higher exports to Egypt and Iraq.

Nonetheless, Brazilian exporters have currently three major concerns affecting the outlook for broiler exports in 2012 such as the continued overvaluation of the Brazilian currency, uncertainties derived from the world financial crisis and its impact on importing markets and specific issues with major trading partners such as the Russian Federation and South Africa. South Africa was the 7th largest market for Brazilian broiler exports in 2011 with shipments of 195,416 tonnes.

In 2011, the total volume of broiler meat exports, including chicken feet and paws, reached 3.7 million tonnes, an increase of 3.3% from 2010. However, the value of exports increased by 22% to US$7.6 billion due to the increase in the average price of broiler meat in the world market.