USA, Washington, D.C. Post forecasts broiler production to increase by 3% in 2017, to 14 mill. metric tons. This increase is mostly driven by higher world demand for the Brazilian product, especially after the impact of the Avian Influenza in several countries and continued increasing broiler exports to China. In addition, domestic demand for boilers should improve in 2017 as the Brazilian economy is projected to grow and inflation is likely to be under control. Feed prices remain as the main constraint, although large packers benefit from lower-priced corn imports and subsidized government bids from public corn stocks.
Post forecasts broiler exports in 2017 to expand by 5% to 4.4 mill. metric tons, over this year ́s record. The growth in exports will likely be driven by higher world demand for the Brazilian products, mostly from China, the European Union and new markets recently opened. Brazil is now able to exports broilers to 158 countries, but 65% of all poultry exports are concentrated in seven countries (China, European Union, Hong Kong, Japan, Saudi Arabia, South Africa and United Arab Emirates).
Other market access work is being conducted in several countries, of which Indonesia is one of the most important, despite the WTO case by Brazil against that country. Brazilian broiler exporters remain optimistic about their traditional markets, such as Saudi Arabia, Japan and UAE in 2017, but look forward to increased exports to the following key countries to expand exports:
Brazilian broiler exports to China is increasing rapidly this year as a result of the Avian Influenza in the United States, but also because of the increasing number of plants approved to that market. Currently 29 plants are approved for China, but by the end of the year this number may increase to 40 plants in 2017. A Brazilian trade mission is expected to visit China in September with the purpose to negotiate new plants approvals to that market. Brazilian chicken feet are highly competitive in the Chinese market as the Brazilian currency devaluates further.
Mexico and Chile:
Brazilian exporters are optimistic about these two markets, mostly Mexico which offers a potential over 200,000 metric tons in view of the Avian Influenza outbreak in the United States. The Brazilian goverment is negotiating the increase in the number of poultry plants to Mexico which is expected by the end of the year.
Pakistan, Malaysia and Myanmar:
Three new markets for Brazilian broilers with a potential for more than 50,000 metric tons, according to Brazilian exporters.
Iraq, South Africa and South Korea:
Brazilian exporters are optimistic about increasing exports to the two first markets, but less to South Korea in 2017. The Brazilian government is planning another trade mission to that country with the purpose of increasing exports of broilers and pork.
Although exports to Russia are up this year, Brazilian broiler exporters are not so optimistic about next year ́s exports to Russia due to the lower oil prices and the economic situation in that country.
this market remains as the most negative factor for Brazilian Chicken exports this year and likely will continue next year due to continued political and economic uncertainty. Lower oil prices combined with a political and economic crisis have affected the country ability to pay for their imports.
Review of 2016:
Post increased exports of broilers in 2016 by over 9%. Higher exports this year are mostly attributed to four factors: impact of the Avian Influenza, competitive prices of the Brazilian product during the first half of the year, and exemption of poultry packers for PIS/COFINS tax of 9.35% and a significant demand from chicken.