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major supplier

Brazil set to become a major supplier of meat products to China

July 31 2015

Brazil is poised to become the foremost major supplier in meeting additional global demand, mostly originating from Asia according to the 148-page OECD-FAO Agricultural Outlook 2015-2024 report which featured Brazil. The nation is predicted to be the top beef and poultry exporter by 2024 with export shares of 20 percent and 31 percent respectively.

This is a big threat to U.S. exports already hurt by more than 220 detections of highly pathogenic avian influenza since. The deadly virus, which has affected 48 million birds, was last reported on June 17, according to the U.S. Department of Agriculture.

China’s ban on poultry imports from the U.S., where flocks have been ravaged by bird flu could give more Brazilian farmers a foot in the door of the biggest import market.

China bought more than $170 million of chicken feet from the U.S. last year making it the biggest overseas market for the product according to a February report by USDA staff in Beijing. Sales were halted when poultry and poultry products were banned by China in January 2015 in response to the worst outbreak of highly pathogenic avian influenza in U.S. history.

That helped push the import price in China for chicken feet (called chicken paws in the U.S.) to an average of $1,600 a metric ton in the first quarter, a 10 percent increase from a year earlier, Rabobank International said in a report in May. By comparison, the wholesale price for a whole chicken in Brazil was $1,236 a ton.

The Chinese are especially keen on chickens feet, a popular side dish which they will pay as much for as the breast. A delegation from China’s quarantine office in Beijing left Brazil earlier this month after a 10-day mission to inspect potential new meat suppliers in four states, the Brazilian Trade and Investment Promotion Agency said.

Brazil already supplies about half of China’s broiler-meat imports. Export approval for seven extra packing plants could push chicken-meat sales to China to $800 million from $518 million last year, the trade group, known as APEX, said. For U.S. farmers, that could cut into their most lucrative overseas market for chicken feet.

“If the bird flu problem gets worse in the U.S., Brazil has the capacity to meet global demand,” said Alberto Bicca, international business analyst with the trade group APEX. “Our price and quality are attractive.”

Agricultural output has more than doubled since 1990 in Brazil and livestock production has almost trebled, thanks to productivity gains.

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