April 13, 2012
Poultry Takes Lead in Brazil Meat Exports, Pork Languishes
During the first three months of 2012, poultry products (chicken and turkey) accounted for 53% of Brazil's meat exports followed by beef at 37% and pork at 10%. Of the exported poultry products, chicken accounted for 49.8% of the total and turkey accounted for 3.5%. Although turkey represents only a small portion of the total, its year-on-year increase has been higher than any other meat product at 33%.
As evidence of the growing strength of poultry in Brazil's meat sector, BR Frango Industria yesterday inaugurated a new poultry processing facility in northern Parana. When fully operational in 2014, the R$ 120 million facility will employ 2,500 workers and be able to process 420,000 chickens per day, which will make it one of the largest processing facilities in Brazil. Parana is the leading poultry producing state in Brazil responsible for 27% of Brazil's total production.
While poultry might be on a role, pork processors in Brazil are still struggling with the surprise embargo enacted by Russia on Brazilian pork products in 2011. According to Mendes Ribeiro, the Brazilian Minister of Agriculture, the eleven month old embargo may be ending soon. After meeting with his Russian counterpart at the end of March, he feels the remaining differences between the two countries can be resolved over the next few months. This is not the first time Brazilian officials felt they were close to a resolution of this issue only to have Russian officials raise new objections.
The Russians claim that they instituted the embargo because the Brazilian sanitary practices did not meet their standards, but Brazilian officials have felt all along that Russia took the surprise action for domestic political purposes.
Of the 139 meat processing facilities in Brazil that are registered with the Russian sanitary inspection service, 9 are currently allowed to export meat products to Russia, 40 must pass more rigorous exams, and 90 continue to be embargoed. Of the nine facilities allowed to export meat to Russia, only two are pork processors, one in Goias and one in Minas Gerais. The remaining 17 pork processing facilities in Brazil remain under the embargo.
Adding to the woes of Brazilian pork producers was action taken by Argentina earlier this year. The Argentine government instituted protectionist's policies that restricted the importation of many Brazilian products including pork. Before Argentina instituted these new policies, Brazil was exporting 4,000 tons of pork per month to Argentina, but that has now fallen to 500 tons per month. The Brazilian Minister of Agriculture stated that they are negotiating with Argentina for a quota of 3,500 tons of pork per month, but the issue has not yet been resolved.
Prior to the embargo, Russia was Brazil's principal purchaser of pork products, but they have now fallen to third place behind Hong Kong and Ukraine.