In 2010, Brazil and the US are expected to ship some 3.4 million tonnes and 2.6 million tonnes, respectively. These two combined account for three-quarters of total chicken meat exports estimated at a little over eight million tonnes a year (excluding chicken paws).

During the current decade, Brazil has taken over from the US as the number one exporter. However, according to FAPRI, in the next 10 years, Brazil's exports will likely stabilise at around the 3.6 million tonnes level, while shipments from the US are expected to recover back to about the 3.5 million tonnes mark. As a result the US is expected to expand its market share from 39.4 per cent over the period 2009-2013 to 41.7 per cent from 2014 to 2018. In contrast, Brazil's market share is expected to decrease over these two time periods from 49.2 per cent to 44.8 per cent.

However, the United States Department of Agriculture (USDA) projects Brazil's exports of both chicken and turkey meat combined to continue gaining ground to reach 4.6 million tonnes by 2019, while showing US shipments fairly stable at just 3.3 million tonnes out of a global total of some 9.6 million tonnes. If these projections are realised, Brazil will have captured 48 per cent of the poultry meat export market in 2019 against 43 per cent this year, while the US's share will have slipped from 38 per cent to 34 per cent.

In 2009, the Middle East was again the major customer for Brazilian chicken, taking 1.4 million tonnes showing an increase of almost 23 per cent over the previous year. Nevertheless, total exports last year failed to match the 2008 level. Shipments to Asia, the second leading destination, the EU (third) and the Americas (fifth) declined, though sales to Africa – Brazil's fourth most important customer in volume terms – jumped by 22 per cent to 422,000 tonnes. The oil price recovery has benefited Angola, while South Africa has reduced its import tariffs. The quantities purchased by Egypt rose by more than 100 per cent, almost certainly as a result of the government's policies to cull chickens because of outbreaks of avian influenza and to open up the market to imports. An improvement in real incomes generally in the African continent is another key factor to further boost chicken meat imports.

Brazil's exporters are endeavouring to consolidate their markets in the Middle East where economies were less severely hit by the global recession and where local production is unable to meet rising consumption. Halal slaughtering is becoming increasingly common in Brazilian slaughterhouses. There are indications that Brazilian exporters are keen to open or expand markets this year targeting in particular Indonesia, Malaysia, Nigeria, Sudan, Mexico, Senegal and even the US.

Changes in the value of the Brazilian real against the American dollar can have a significant impact on trade. The appreciation of the real last year was detrimental to exports as it made Brazilian chicken less competitive.

Brazil, in conjunction with Paraguay, Uruguay and Argentina, comprise the trade organisation Mercosur, which is keen to re-open discussions with the European Union in a bilateral agreement that would expand EU imports from Mercosur countries. It is understood that 15 of the 27 EU Member States are opposed to the negotiations. Brazil's exports to the EU fell by 15 per cent in the first four months of 2010.

Recently, Turkey announced that it would soon buy poultry direct from Brazil in an attempt to curtail rising chicken prices in its domestic market. Currently, Brazilian chicken enters this market via neighbouring countries like Iraq.

The Brazilian poultry exporters' association calculates that the country's exports in 2009 at 3.63 million tonnes were down by 0.3 per cent on 2008.

Figure 1. Major chicken meat exporters in the Americas

A major problem facing US traders is that, over the past decade or so, 30 per cent of all chicken meat exports have been destined for Russia. However, not only has Russia decreased its import quota for 2010 but also, over the first six months of this year, it banned imports of poultry meat treated with chlorine, which affected the bulk of US supplies. At the time of writing, it looked as though US exports to Russia would resume soon as the two countries have agreed on a number of chemicals that can be used to disinfect the meat. Under the new rules, importers will be obliged to indicate which substances have been used in a separate document to the veterinary certificate. Also, there are reports that the US may lose up to one-quarter of its Russian poultry quota, cutting it from 600,000 tonnes to 450,000 tonnes. During the first quarter of this year, US exports of chicken meat fell by 20 per cent when compared with 2009.

It is currently estimated that Russia will import around 850,000 tonnes of poultry meat this year – seven per cent less than in 2009. Russia is expected to produce 3.1 million tonnes of poultry by 2012 from 2.5 million tonnes in 2009, and the domestic view is that poultry imports should fall to zero no later than 2015.

The US exports about 20 per cent of its chicken production. The bulk comprises leg portions to Russia and paws to China. Russia normally imports about 700,000 tonnes of leg quarters, while China takes nearly 500,000 tonnes of paws plus some 250,000 tonnes of leg quarters. Thus, these two countries account for around 40 per cent of US chicken meat exports. Clearly, any reduction in trade with them would have a dramatic impact on the US domestic market, particularly on the prices for leg quarters and paws. A decline in the value of these items would require US processors to obtain higher prices for the breast meat.

Some of the largest broiler integrators, particularly in the US, are looking to expand their businesses by developing projects around the world. One of the latest of these ventures is a proposal by Cargill Inc. to build a broiler operation in Russia. The $30 million facility will produce a range of chicken products for the Russian market. Construction is due to start in the third quarter this year and become fully operational by the end of 2011, the meat being sourced from Russian producers.

Although tiny by comparison with Brazil and the US, Argentina is shipping more chicken meat every year. The total is expected to top 200,000 tonnes this year.

The Americas is not a significant chicken-importing region with the exception of one country – Mexico. This year's production in Mexico estimated at 2.79 million tonnes shows little change from last year, reflecting the fact that reduced incomes, as a result of the global economic crisis, hit chicken meat sales despite this being the cheapest protein option. Future growth will depend on the rate of economic recovery and the price of imported grains, as Mexico is a grain-deficient country. However, it is considered that any cost reduction arising from cheaper US grain will to some extent be offset by higher energy, packing materials and transportation costs. For 2010, the estimate of broiler meat imports has been increased to more than 500,000 tonnes.

While the US continues to be the leading supplier to this market, it has lost some ground to Chile, especially with regard to mechanically separated chicken, which accounts for around 28 per cent of total imports.

Figure 2. Major chicken meat importers in the Americas

Further Reading

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