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Brazil profits from EU woes

It’s time to renew the focus on chicken imports from Brazil. Brazilian activities were among the interesting details in the February poultry import statistics. Import volumes are declining, as markets have not yet recovered from coronavirus disruptions, and bird flu is sweeping across Europe, preventing most countries from exporting chicken.

Europe is down, but not Brazil, which seems to be taking advantage of Europe’s troubles, as it did in 2017 and 2018. Now, as most European producers are shut out of the market, Brazil’s exports to South Africa are rising. Brazil has pushed its share of South Africa’s poultry imports to 77%, up from 73% in January and an average of 55% in 2020.

While Brazil is under investigation for dumping chicken here, it continues to supply frozen portions at import prices that undercut local producers. In the first two months of 2021, Brazilian leg quarters have been imported at R21.54/kg (including the new 62% tariff), compared to the South African producer price of R23.25 for IQF (individually quick frozen) portions.

Leg quarters and other bone-in cuts are where the damage is being done to the local industry. Brazilian supplies of bone-in chicken are increasing as European supplies decline.

This must be watched closely while the tariff authorities investigate the long-held belief that Brazilian imports are coming in at dumped prices.

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