W4 Chicken Update: Global Chicken Exports Surge as Brazil Dominates, while South Korea Faces Self-Sufficiency Concerns

USDA Forecast Highlights Brazil's Dominance, Uneven Growth in Global Chicken Exports

The United States Department of Agriculture (USDA) projects global chicken meat exports to reach 13.9 million metric tons (mmt) in 2024, reflecting a modest 6.4% year-on-year (YoY) increase compared to 2020. Brazil's projected export volume for 2024 is approximately 5 mmt, marking a 27% increase from 2020. Brazil's annual increase aligns with the global cumulative growth observed over the preceding five years. China's growth surpasses that of Brazil, exceeding 40% during this period, equivalent to an annual growth rate of nearly 10%. However, the additional volume from China over the five-year period amounts to approximately 160 thousand mt, representing only 15% of Brazil's additional volume. Brazil's exports are expected to rise from 3.875 mmt in 2020 to 4.925 mmt in 2024, representing a remarkable 27% increase from 2020. This translates to an average annual growth rate of 6.8%, exceeding the global average.

Thailand’s exports are poised for a similar growth trajectory, approaching 5% annually, though they continue to comprise less than a quarter of Brazil's total exports. The United States (US) is projected to maintain relative stability over the five years, hovering around 3.3 mmt between 2020 and 2024. However, the USDA forecasts a 2% decline in 2024 compared to the 2020 figures. In contrast, the European Union (EU) is anticipated to experience a substantial reduction exceeding 15% over the five years. This decline is significant, and while speculating Brexit as a contributing factor, the United Kingdom’s (UK) departure occurred on Jan-20. Furthermore, UK exports plummeted by over 50% until 2023. Inclusive of the UK figures, the EU's export decline would surpass 20%.

Finally, other exporters are also expected to face a decline in export volume. The USDA's 2024 forecast for these exporters is approximately 2.3 mmt, representing 46% of Brazil's projected exports. However, this volume, while recovering from 2023, signifies a nearly 9% decrease compared to 2020 export levels.

South Korea's Chicken Imports Surpass Record Highs, Raising Self-Sufficiency Concerns

South Korea witnessed a significant rise in chicken imports in 2023, driven by the government's quota tariff policy aimed at stabilizing domestic prices. This influx resulted in a decline in domestic chicken self-sufficiency to below 80% for the first time in over two decades. Chicken imports reached a record-high 234.9 thousand metric tons (mt) in 2023, representing a 65% YoY increase compared to the 2022 import volume of 141.7 thousand mt. This marks a substantial escalation from the 2019 import volume of 141.7 thousand mt and surpasses previous highs.

The government implemented a quota tariff system in 2022 and 2023, allowing specific import volumes (82.5 thousand mt in 2022, and 150 thousand mt in 2023) at reduced or zero tariffs. This policy is credited with driving the import surge. The abundance of imported frozen chicken, primarily used in ready-to-cook products, led to decreased utilization of domestic chicken, resulting in a self-sufficiency rate of only 77% in 2023, down from the 80% range sustained since 2002. Domestic producers advocate for ceasing quota tariff imports, citing their detrimental impact on the financial viability of broiler farms. Continued import policies in 2024, albeit at a reduced volume of 30 thousand mt, this decision is likely to further fuel the debate between prioritizing consumer price stability and supporting domestic production. The government's 2023 import budget for 150 thousand mt of chicken amounted to USD 75.7 million. Critics argue that this expenditure, coupled with ongoing imports, exacerbates the financial challenges faced by broiler farms.