Escalation of the Middle East conflict may affect maritime transport; Brazilian chicken meat exporters closely monitoring the situation.

According to a report by CNN Brazil on March 2, data released by Brazil's Ministry of Development, Industry, Trade and Services (MDIC) shows that agricultural products hold an important position in Brazil's export trade to the Middle East. Among these, unground corn (excluding sweet corn) accounts for 20.8% of Brazil's total exports to the region; sugar and sugar syrup combined account for 17.4%; chicken meat and its edible offal (fresh, chilled, or frozen) account for 14.5%; beef (fresh, chilled, or frozen) accounts for 6.8%; followed by soybean meal (4.3%), live animals (3.9%), unroasted coffee (2.4%), and soybeans (2.3%). In other words, chicken meat is one of the top three agricultural products exported by Brazil to the Middle East, a region that is highly dependent on imports and extremely sensitive to logistical risks. The main concern for the Brazilian chicken meat export industry is not a decrease in market demand, but the unstable factors facing the logistics sector. The Middle East is home to strategically important points in global trade, such as the Strait of Hormuz and the Red Sea. If conflicts in the region escalate, they could affect freight rates, marine insurance costs, and delivery times. The Brazilian Animal Protein Association (ABPA) issued a statement saying that it is closely monitoring the situation. "ABPA and its members are examining and monitoring the key logistics points in the conflict-affected areas. Currently, the industry is analyzing alternative routes that were used during previous crises in the region. It is important to note that the volume of Brazilian chicken exports to Iran is not significant." This clarification regarding Iran somewhat reduces the risk of direct impact on bilateral contracts. The current risks are more indirect, such as rising international oil prices, increased costs of marine fuel, higher marine insurance rates, and potential changes in shipping routes. An analysis report published by the Brazilian agricultural information platform Farmnews pointed out that the Middle East is an important region for the global oil market, and any disruption in supply could put pressure on production and transportation costs. Under tension, maritime freight rates usually rise, further compressing the profit margins of companies. For the Brazilian chicken meat industry, which already has slim profit margins and faces intense international competition, rising logistics costs and extended delivery times could be disruptive. For corn and sugar, which are also major export agricultural products, the additional risks faced by the industry mainly focus on currency fluctuations and rising freight costs. The platform also stated that recent experience shows that geopolitical crises in the region may not reduce food demand but will increase operational uncertainty. In the short term, route adjustments and cost fluctuations are the main concerns for the industry. In the medium term, the trends in oil prices and maritime freight rates will determine the extent of the impact of this crisis on Brazilian agricultural export companies.