According to analysis published in May by USDA in its egg and poultry review of Brazil, ‘Brazil’s broiler meat production is estimated to reach 13.3 million metric tons in 2012, driven mostly by domestic demand and a small recovery in exports.’ Between 2009 and 2012, Brazilian broiler meat production is projected to have risen by 20%. With domestic per capita consumption increasing by 19.5%, exports are projected to increase over the period by 11%.
Three of Brazil’s top 25 export destinations are in Africa (South Africa, Angola and Ghana). In 2010, these three destinations accounted for 280,990 tonnes of Brazilian broiler meat exports, almost the same level as the EU (281,878 tonnes). In 2011, Brazilian exports to South Africa, Angola and Ghana rose by 8%, 38% and 35% respectively, resulting in these three African markets taking 12% greater volume in exports than the EU. Only Brazilian broiler meat exports to Saudi Arabia (622,643 tonnes), Japan (444,346 tonnes) and Hong Kong (339,364 tonnes) exceeded those to these three African destinations.
Brazil accounts for 31.7% of all global poultry-meat exports. However, it is anticipated that Thailand’s re-emergence as an exporter of raw poultry meat following the lifting of EU SPS-related import restrictions will intensify price competition for Brazilian exporters on the EU market.
Of the top three African destinations, South Africa is by far the largest, taking some 59% of the combined total of the three countries. It is for this reason that Brazil has initiated action in the WTO against the South African government’s decision to impose additional import tariffs (ranging from 46.6 to 62.9%) on Brazilian poultry meat, following South African criticisms of ‘dumping’ by Brazilian exporters (see Agritrade article ‘ Debate intensifies over South African poultry tariff policy’, 3 March 2012).
Brazil accounts for 73% of South African chicken imports and around 15% of the chicken consumed in South Africa. If a mutually agreed solution cannot be found within 60 days of the complaint being lodged, the matter will go to a WTO dispute resolution panel.
According to USDA figures published later in May, African poultry production is projected to increase by 1.4% between 2011 and 2012, while imports are projected to increase by 6.1%, with particularly strong growth in imports in Angola, Benin and Ghana. This will raise African imports of poultry meat to a volume equivalent to 32.1% of domestic production (up from 30.7% in 2011). According to USDA, imports now account for 24% of African domestic demand, up from 18% in 2009.
USDA takes the view that ‘South Africa’s anti-dumping tariffs on Brazilian poultry are expected to negatively influence Brazilian poultry imports.’
At the global level, according to a Rabobank adviser, it is anticipated that poultry prices will remain strong until at least October 2012 as a result of high global demand, although rising input costs will put pressure on profit margins of poultry producers. Nevertheless, in the period to 2020 poultry-meat production is expected to grow at the fastest rate, in response to the emerging ‘structural scarcity’ of animal protein.
While Brazil’s broiler meat exports rose by 3% overall between 2010 and 2011, growth in Brazilian poultry exports to the three main African destinations is considerably higher. Brazil’s 58% drop in exports to Russia and 42% drop in exports to Egypt (a total drop of 136,338 tonnes) may in part account for the increased attention being paid to African markets by Brazilian exporters. The imposition of anti-dumping duties by South Africa is likely to increase pressure from Brazilian exports on other African markets, particularly in West and Central Africa. However this could be eased by WTO requirements under Russia’s accession agreement regarding the opening of its poultry-meat markets.
The South African action highlights the importance of the use of trade policy tools to the trade in poultry meat.
The growing importance of imports in meeting domestic poultry demand in Africa (up from 19% to 24% of demand) may well receive increased attention in the coming years, in view of national policy concerns to enhance domestic food production, and the emergence of what Rabobank refers to as an emerging ‘structural scarcity’ of animal protein.