Brazilian Poultry Farmers Eye Chinese Market

July 15, 2015 06:00 AM
Brazilian Poultry Farmers Eye Chinese Market

China’s ban on poultry imports from the U.S., where flocks have been ravaged by bird flu, could give more Brazilian farmers a foot in the door of the biggest import market, literally.

It’s chickens’ feet the Chinese are especially keen on -- a popular side dish they will pay as much for as the breast. A delegation from China’s quarantine office in Beijing left Brazil earlier this month after a 10-day mission to inspect potential new meat suppliers in four states, the Brazilian Trade and Investment Promotion Agency said.

Brazil already supplies about half of China’s broiler-meat imports. Export approval for seven extra packing plants could push chicken-meat sales to China to $800 million from $518 million last year, the trade group, known as APEX, said. For U.S. farmers, that could cut into their most lucrative overseas market for chicken feet.

“There is no country in the world that consumes as much chicken feet as China, or that pays the prices China does,” said Reni Eduardo Girardi, industrial manager at CVale. The Palotina, Parana-based agribusiness cooperative will ship 15,340 tons of chicken meat to China this year, accounting for a quarter of its chicken-meat exports, Girardi said.

Brazilian companies Sao Salvador Alimentos S/A, BRF SA, Cooperativa Agroindustrial Copagril and JBS SA also stand to benefit from greater access to the Chinese poultry-meat market.

Feeding more mouths in Asia will help cement Brazil’s place as the world’s largest supplier of food and agricultural products after the U.S., the Organization for Economic Cooperation and Development and Food and Agriculture Organization said this month. Agricultural output has more than doubled since 1990 in the South American country and livestock production has almost trebled, thanks to productivity gains.

Top Supplier

“Brazil is poised to become the foremost supplier in meeting additional global demand, mostly originating from Asia,” the groups said in their 148-page OECD-FAO Agricultural Outlook 2015-2024 report, which featured Brazil. The nation is predicted to be the top beef and poultry exporter by 2024, with export shares of 20 percent and 31 percent respectively.


That’s a threat to U.S. exports, already hurt by more than 220 detections of highly pathogenic avian influenza since Dec. 19. The deadly virus, which has affected 48 million birds, was last reported on June 17, according to the U.S. Department of Agriculture.

China bought more than $170 million of chicken feet from the U.S. last year, making it the biggest overseas market for the product, according to a February report by USDA staff in Beijing. Sales were halted when poultry and poultry products were banned by China in January in response to the worst outbreak of highly pathogenic avian influenza in U.S. history.

Foul Play

That helped push the import price in China for chicken feet (called chicken paws in the U.S.) to an average of $1,600 a metric ton in the first quarter, a 10 percent increase from a year earlier, Rabobank International said in a report in May. By comparison, the wholesale price for a whole chicken in Brazil was $1,236 a ton.


“We Chinese like to eat innards, feet or wings, while American consumers find those things unappetizing and like to eat the breast -- Chinese find the breast too bland,” said Ma Wenfeng, senior researcher at Beijing Orient Agribusiness Consultant Ltd., an advisory firm. “Now that the bird flu has rendered the U.S. supply unavailable, China wants to cast its net wider to explore other origins.”

Brazil, which vies with the U.S. as the world’s largest exporter of poultry meat, is a logical target and a “viable candidate” to replace U.S. supplies in China, Ma said.

The Chinese delegation will analyze samples from four Brazilian meat-packing plants in deciding whether to grant them and three others export approval, the Brazilian Animal Protein Association said. A decision may take 30 to 60 days.

“If the bird flu problem gets worse in the U.S., Brazil has the capacity to meet global demand,” said Alberto Bicca, international business analyst with the trade group APEX. “Our price and quality are attractive.”


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