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Brazilian Poultry Companies May Need to Cut Down on Production

25 October 2013

BRAZIL - Francisco Turra, president of the Brazilian Poultry Union (UBABEF), said that several companies in the poultry sector reported a reduced production of poultry meat for the second half of 2013.

Mr Turra said, "According to information made available by companies, the reduction in the production of poultry can get, in some cases, up to ten per cent of the total produced in the same period in 2012."

Mr Turra highlighted that due to factors such as production costs, reduced inventories of soybean meal and exchange rate fluctuation, the poultry companies may need to reduce production.

In the case of production costs, the contingency and record exports of raw materials, especially soybeans, are creating major difficulties for the purchase and maintenance of adequate stocks.

"It is clear that companies want to avoid a situation like the historical crisis of 2012 will not repeat itself, with more than 10,000 layoffs, plant closures and lack of inputs for animals already housed," he noted.

Another factor presented by some agricultural industries, especially exporters, is insecurity with respect to businesses that depend on foreign exchange transactions.

"The fluctuation of the exchange rate affect stability of negotiations and is marked by a loss of competitiveness in the sector," he said.

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