W37: Chicken Update

In W37 in the chicken landscape, the Food and Agriculture Organization (FAO) indicates that the meat price index reached 115 points at the end of Aug-23, a substantial 15% increase compared to the period from 2014 to 2016. However, this represents a notable decline in the chicken meat index, dropping by 3.8% month-on-month (MoM) and decreasing by a significant 12% year-on-year (YoY). This price decline can be attributed to an oversupply in the market, particularly from Brazil, despite an uptick in demand from East Asia and the Middle East.

The Foreign Trade Secretariat (Secex) reports that Brazil’s chicken meat (whole chicken, cuts, processed meat, and salted meat) exports reached 435.5 thousand metric tons (mt) in Aug-23, a modest increase of just over 3% compared to both Jul-23 and Aug-22. Brazil’s chicken meat shipments reached 3.42 million metric tons (mmt) in the first eight months of 2023, an increase of 8.5% over the same period in 2022. Secex also reports that Brazilian chicken exports totaled 4.92 mmt in the past 12 months, a surge of 5.5% YoY.

With Brazilian chicken meat export prices retracting from the historic highs of 2022, 2023 foreign exchange revenue has been growing at a more moderate, occasionally negative, YoY rate. Aug-23's chicken export revenue was almost 10% lower than in the same period in 2022. Nevertheless, the accumulated chicken export value registered an increase of just under 6% YoY in the first eight months of 2023 after a 33% YoY surge in 2022. Despite this slower pace, the chicken meat export value still surpasses that recorded during the first eight months of 2021 by a significant 41%, even with a volume increase of just 15%.

The United Arab Emirates (UAE) and South Africa agreed to resume Argentine chicken and egg imports, following Argentina's reinstatement as a disease-free country on August 8. This comes approximately seven months after the initial avian influenza case in Argentina. After five months of negotiations, South Africa's Department of Agriculture, Land Reform, and Rural Development (DALRRD) announced the resumption of fresh meat and poultry product trade. Similarly, the Ministry of Climate Change and Environment in the UAE lifted restrictions on fresh egg and chicken meat exports from Argentina on September 12. However, these agreements came with specific requirements, including modifying the health certificate to ensure Argentina's entire territory is free of avian influenza, as the UAE had previously banned exports from affected provinces.

Lastly, South Africa's poultry industry faces a severe crisis, with over 3.79 million birds lost to a highly contagious new strain of avian influenza (HPAI) called H7N6 since Jun-23. This strain is even more infectious than H5N1, impacting egg and poultry meat availability. Strict biosecurity measures are in place, but H7N6 continues to spread, with wild birds posing a significant risk. Discussions are underway to procure emergency vaccines, which could take two to six months to begin. A vaccine tailored to the domestic H7N6 strain is in development but may take three to six months for widespread use.

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