International Egg and Poultry Review - By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week covering U.S. Broiler Exports to Nontraditional Markets.

U.S. Broiler Exports to Nontraditional Markets

From 1999-2002, U.S. broiler meat exports averaged 2.25 million tons. On average, 12.3 percent was shipped to countries in the Caribbean, Eastern Europe, Africa and Central America. These regions accounted for 17 percent of volume and 27 percent of value in 2002. Economic growth and gains in the food industry sector have allowed broiler meat exports to grow an average of 35 percent in volume in 2002 from 2001 in these markets.

In 2002, exports to the Caribbean totaled 52,000 tons valued at nearly $23 million. Sales to Cuba drove much of the growth in exports to the Caribbean. Other Caribbean countries, such as Haiti and Jamaica, contributed to increased exports with a total volume of 40,140 tons valued at $23 million in 2002.

Exports to Eastern Europe increased were primarily driven by demand from Romania. The U.S. shipped over 30,000 tons to Romania in 2002, doubling the 2001 level. Romania is tentatively scheduled to join the European Union in 2007 and is unclear how U.S. poultry shipments will be affected at that time. Exports to Greece totaled nearly 27,000 tons, presumably transshipped to the Balkans.

U.S. boiler exports to Africa increased 49 percent in volume in 2002 compared to 2001 levels. Exports to Angola have been steadily increasing, from 7,222 tons in 1999, to 47,493 tons in 2002. Other markets in Africa include Ghana, Gabon, the Gambia and Sierra Leone. Exports to Central America have historically revolved around exports to Guatemala. In 2002 broiler exports to Guatemala totaled 45,154 tons valued at $28 million, up 25 percent from a year ago.

On average, 12.3 percent was shipped to the Caribbean, Eastern Europe, Africa and Central America. In 2002 alone, these regions accounted for 17 percent in volume and 27 percent in value.

U.S. Dollar as a World Reserve Currency

The Bretton Woods Accord of 1944 created the International Monetary Fund (IMF) and the World Bank; established fixed foreign currency rates for major currencies; and set the price of gold at US $35 per ounce. The US dollar thus became the world’s main reserve currency. In 1971 the U.S. ended its legal obligation to exchange dollars held by foreign banks for gold. This resulted in a system of flexible exchange rates for the dollar in terms of other countries’ currencies.

By the late 90s, more than 80 percent of all foreign exchange transactions and half of all world exports were denominated in US dollars and accounted for about two thirds of all official exchange reserves. OPEC oil contracts are priced in US dollars.

At the end of 1997, over half of the official foreign exchange reserves worldwide were held in dollars, about 14 percent was held in German marks and French francs, and about 5 percent in Japanese yen. In 1999 the European Union introduced a single currency, the euro, which was adopted by 11 countries. Greece joined in 2002. At the time, the European Monetary Union accounted for almost 20 percent of world trade and world GNP.

Some countries complain the U.S. dollar has become too volatile. African countries have requested policies to reduce currency exchange risks and price risks on commodities. In a paper on the relationship between trade and finance/trade and debt, Cuba asserted one of the main concerns of developing countries were fluctuating exchange rates. In April, 2003, Indonesia’s state oil company said it was considering dropping the U.S. dollar for the euro in its oil and gas trades as the dollar had become too volatile. Malaysia proposed a currency basket of the euro and the U.S. dollar for oil trades. Russia will start pricing its oil and gas exports in euros instead of dollars to forge closer ties with the European Union. Earlier this year when Russia when Russia proposed new import quotas on poultry, pork and beef imports, the over quota import duty on pork and beef was quoted in euros.

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Source: USDA's Agricultural Marketing Service - 21st October 2003.