W3: Chicken Update

In W38 in the chicken landscape, Brazil's slaughtered chicken market witnessed its most robust performance in the last six months in the first half of Sep-23. The average price for slaughtered chicken reached USD 1.40 per kilogram (kg) during that period, ranking as the third-highest value recorded so far in 2023, behind the USD 1.48/kg in Mar-23 and USD 1.52/kg in Jan-23. This represents an almost 10% increase compared to the first half of Aug-23. However, this average price declined by 14% compared to the same period in 2022, when chicken prices surpassed USD 1.62/kg in the São Paulo market.

Despite Brazil's strong performance in chicken exports so far in 2023, there is a growing concern in the animal protein sector about falling prices for Brazilian products on the global market. According to Safras and Mercado, while current chicken prices are on par with 2022 values, further declines are expected in the coming months. Experts emphasized that Brazil will likely maintain its global leadership in chicken meat for the next five to ten years. However, the challenge lies in stabilizing the average price. The average value for Brazilian chicken meat was USD 1,872.80 per metric ton (mt) in Aug-23, a 6.3% decrease from Jul-23, and a 12.24% drop from Aug-22. Brazil’s chicken meat exports amounted to 3.4 million metric tons (mmt), valued at over USD 6.7 billion from Jan-23 to Aug-23. Safras and Mercado estimate Brazilian chicken meat export volume at 5 mmt by the end of 2023, accounting for a third of the global chicken trade.

Brazil’s Ministry of Agriculture confirmed Japan's temporary suspension of poultry product imports from Mato Grosso do Sul following the detection of avian influenza on a farm in Bonito (MS). The ministry received a notification from the Japanese government on September 19 regarding the temporary embargo, which covers eggs, live birds, poultry meat, and their by-products from the state. However, commercial trade with other Brazilian states remains unaffected. The Japanese government's decision to suspend imports aims to prevent the spread of the disease into the country. According to the Brazilian Agribusiness Foreign Trade statistics system (Agrostat), Mato Grosso do Su exports 18.4% of its fresh chicken meat production to Japan. Sanitary measures and surveillance efforts are underway to contain and eradicate the outbreak, with no confirmed cases in commercial breeding stock in Brazil. This confirmation maintains Brazil's status as free from highly pathogenic avian influenza, according to the World Organization for Animal Health (OIE).

The Association of Poultry Farmers of Paraguay (Avipar) reported a decline in the influx of smuggled poultry products, alleviating the pressure on the domestic chicken production sector. This positive change is attributed to enhanced border controls that help deter the entry of illegal products and ultimately benefiting the domestic market. Large refrigerators reported a return to normal commercial activity, with a notable absence of discussions about stock accumulation. Customers and distributors who once resorted to illegal products have reactivated orders from legitimate producers.

Lastly, according to the National Animal Quality and Health Service (Senacsa) report, Paraguay exported 8.76 thousand mt of poultry meat, offal, and by-products, valued at USD 8.8 million by the end of Aug-23, a 52% year-on-year (YoY) increase in volume and a 49% YoY surge in value. Paraguayan poultry meat shipments were primarily destined for Iraq (20%), Albania (17%), the Bahamas (7%), Mozambique (7%), and others.

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