W6 Chicken Update: South Africa's Import Rebates and Brazil's Cost Relief

Published 2024년 2월 16일

In W6 in the chicken landscape, Brazil's chicken exports faced a slight volume decline but a notable revenue drop in Jan-24 compared to the previous year. Export volume is at 404.9 thousand mt, down 3.8% YoY, and revenue at USD 683.6 million, reflecting a 20.2% YoY decrease. Despite challenges, Japan and key Middle Eastern markets like the UAE, and Saudi Arabia displayed growth in imports. However, China, a significant market, experienced a substantial decline. Paraná, Brazil, leads exports, with other major exporting states witnessing slight volume decreases. Meanwhile, Thailand achieved the status of the world's third-largest chicken exporter in 2023, surpassing its previous ranking. Thailand's success is attributed to government export promotion measures and favorable trade agreements, although challenges persist, including higher production costs compared to competitors like Brazil and the US.

Brazil's Chicken Exports Declined in Jan-24, Key Markets Show Growth

Brazil's fresh and processed chicken meat exports experienced a moderate volume decline in Jan-24 compared to the same period last year, while revenues saw a more significant drop. Based on data from the Brazilian Animal Protein Association (ABPA), export volume reached 404.9 thousand metric tons (mt), representing a 3.8% year-on-year (YoY) decrease from 420.9 thousand mt. Revenues fell by 20.2% YoY, totaling USD 683.6 million compared to USD 856.6 million in Jan-23. The monthly volume remains above 400 thousand mt, exceeding expectations for the first month of 2024. Despite challenges like the complex situation in the Red Sea, nations in the Middle East continue to be significant importers, exhibiting growth in purchases.

The top five destinations for Brazilian chicken meat in January were Japan, the United Arab Emirates (UAE), China, Saudi Arabia, and South Africa. Japan (+6.4% YoY), the UAE (+7.5% YoY), and Saudi Arabia (+7.9% YoY) saw growth in imports compared to Jan-23. China, a major market previously, experienced a significant decline in imports (-36.2% YoY). Diversification in major export destinations is a notable trend to monitor.

Paraná emerged as the leading exporting state with 165.9 thousand mt (+3.8% YoY), followed by Santa Catarina and Rio Grande do Sul. All other major exporting states saw slight declines in their export volumes compared to Jan-23.

Thailand Rises to Third in Global Chicken Exports, Feed Costs Remain a Challenge

Thailand's chicken export industry achieved a notable milestone in 2023, becoming the world's third-largest exporter according to the Thailand Poultry Promotion Association. Thailand exported over 100 thousand mt of chicken worth USD 2.77 billion in 2023, surpassing its 2022 ranking of fourth place. This success is attributed to several factors, including effective government export promotion measures, timely extension of the import of soybean meal under a World Trade Organisation (WTO) agreement, and mitigating feed price rises and shortages. The agreement allows the import of soybean meal at a reduced tariff (2% instead of 119%) and corn for animal feed at a lower rate (20% instead of 70%).

Despite the positive developments, Thailand faces a disadvantage due to higher production costs compared to major competitors like Brazil and the United States (US), which have larger domestic soy and corn production bases. This cost disparity makes Thailand's chicken products less competitive in the global market. The Poultry Promotion Association urges the government to further expand the WTO agreement terms, particularly by increasing import quotas for animal feed ingredients considering further tariff reductions on soybean meal, dried distillers grains with solubles (DDGS), fishmeal, and wheat.