December 16, 2019

 

China now top importer of poultry from Brazil

 

 

Saudi Arabia's position as the top importer of Brazilian poultry for eight years has now been overtaken by China, Brazil-Arab News Agency reported in mid-December.

The country's imports from Brazil amounted to 429,000 tonnes through November 2019, down 1% from a year ago. China imported 513,000 tonnes, up 28%.

The fourth biggest importer of poultry items from Brazil was the UAE at 316,000 tonnes, up 12%, with the country about to become a distribution hub for the Gulf area. Brazil's BRF, the parent company for brands Sadia and Perdigão, owns a plant in Abu Dhabi, UAE. Kuwait ranked ninth with imports down 7% to 104,000 tonnes.

Exports to the Middle East as a whole, however, went from 33.2% of total sales through November 2018 to 34.5% through November this year. Asia's share increased further, from 34.3% to 37.2%.

During a press conference on December 12, Brazilian Animal Protein Association (ABPA) chairman Francisco Turra said Asia's 37% market share is "a giant step" for Brazil.

"Saudi Arabia led poultry exports for eight years straight. This year saw it lose space to China, the runaway leader. The new fact for us was this very aggressive move by China, which so far has taken in 14% of our exports year-to-date. Saudi Arabia's imports decreased somewhat. They had a bit of a scare early into the year as they visited plants, created problems and claimed they were manufacturing domestically, but when they found that China was buying massive amounts, they came in strong and tried, but lost…. Besides buying in big quantities, China paid well," he explained.

However, BRF said in late October that it also plans on opening a plant in Saudi Arabia.

ABPA markets director and chairman-to-be – his term begins in April 2020 – Ricardo Santin said Brazil remains the world's biggest producer and exporter of halal meat.

"Our market position is still comfortable. You have Saudi Arabia, whose imports declined earlier on but are stabilising. This year, they decreased by only 4,000 tonnes, so you no longer have a reduction you had in the past in the number of plants allowed to sell. This goes to show that the halal market is stable and that it can grow," he said.

However, Arab countries will likely experience repercussions from the crisis in China as some of the product that usually ships to the Middle East might ship to China instead.

"For example, China began to buy chicken breast, which it had never done before. They began in October, and that chicken breast is going to come from markets that used to supply Mexico, Europe and the Middle East. These markets might see a decline in supplies, which their domestic industries may cover, or else there might not be enough product to go around," said Santin.

According to the director, the Arab market remains the biggest destination for Brazilian poultry. "And it will remain thus. Of course, the whole disruption which China is causing in every market around the world means the halal market will also be impacted. If China begins buying whole chickens, for instance, there'll be consequences to that. It's too early to tell, but [relations with Arab countries] are still vital to us. The halal market is still one of Brazil's biggest clients," he said.

Some of the poultry products that used to ship to Saudi Arabia up until 2018 is now shipping to other markets, like thet UAE, Yemen, Qatar, Iraq, Oman and Bahrain, as well as less relevant markets like Afghanistan, whose imports have doubled this year according to the ABPA.

Turra expects sales to the Arab market to remain flat and possibly increase in 2020.

According to Santin, the association hasn't made projections regarding importing countries next year. The bloc of 22 Arab countries remains Brazil's biggest client other the domestic market.

"We'd like to see sales [to Arab countries] increase along with global consumption and the shift in consumption that the crisis in Asia will bring about, but we're working under the assumption that sales will at least remain level. If China starts buying more and more, that will not take away from the relevance of Arab countries. China has a long way to go before it starts buying equal amounts of halal meat," he said.

Poultry exports from Brazil year-to-date through November were up 2% to 3.822 million tonnes shipped. Revenue was up 6.1% to US$6.358 billion. Whole-year sales are expected to 4.2 million tonnes, up 2.4% from 2018.

Poultry production is seen going up 2.3% to 13.15 million tonnes this year, with per capita consumption expected to climb 2.2% to 42.6kg.

Egg exports from Brazil are expected to be down 30% to 8,000 tonnes as a result of rising domestic consumption.

"There's not much left to export," said Turra. The UAE are the biggest importer of Brazilian eggs. Through November, the country took in 4,046 tonnes, down 28% from a year ago. Bahrain ranked sixth at 236 tonnes, up 32%, and Saudi Arabia was seventh at 220 tonnes, down 43%.

Hatching egg exports were down 13% in volume and 8.5% in revenue year-on-year through November, to 11,960 tonnes and US$51.72 million.

Day-old chick exports slid 5.4% in volume to 953 tonnes, while revenue was up 7.6% to US$74.81 million.

The biggest markets for Brazilian poultry genetics were Senegal and Paraguay.

Saudi Arabia came in third at 2,004 tonnes imported, up 1% year-on-year. The UAE ranked fifth, with imports down 24% to 1,439 tonnes.

- Brazil-Arab News Agency