Weekly Product Updates

W50 Chicken Update: Russia Welcomes Turkish Suppliers Amid Price Surge, Brazil Sees Export Opportunities and Turkey's Poultry Production Grows

Frozen Whole Chicken
Market & Price Trends
Published Dec 22, 2023

Egg Price Surge Sparks Regulatory Measures in Russia, Opening Doors for Turkish Suppliers

In W50, the surge in egg prices in Russia, with a notable 4.4% week-on-week (WoW) increase, has prompted certain markets to offer eggs in bulk. This escalation is attributed to a decline in chicken volume due to bird flu, rising costs of feed and veterinary medicines, and increased public demand for eggs following an increase in meat prices. In specific regions, egg prices soared to USD 0.11, reaching up to USD 0.22 in Crimea. Facing an imbalance between rising demand and market supply, Russia has decided to allow Turkish egg producers into the market.

The Russian Agricultural Products Inspection Agency (Rosselkhoznadzor) granted export permissions to 17 Turkish companies, subject to inspections for harmful substances. The Rosselkhoznadzor allowed the purchase of eggs from 4 Turkish businesses for the first time in Nov-23. Notably, prices in Russia surged by 42.4% year-on-year (YoY), prompting regulatory attention. In response, the Federal Antimonopoly Service (FAS) is proposing legislation to restrict price hikes by product manufacturers and suppliers, including eggs, to no more than 30% increase without economically justified reasons as part of a broader effort to monitor and control prices.

The Russian government has endorsed a proposal to temporarily eliminate customs duties on chicken egg imports, reducing the rate from 15% to 0%. This exemption for suppliers is set to be effective from January 1 until Jul-24, aimed at boosting domestic market supply and potentially lowering prices. The Ministry of Agriculture anticipates additional egg supplies from Azerbaijan and Türkiye in the coming months.

Actionable Recommendations for Russian Market

The recent surge in Russian egg prices, attributed to bird flu and increased demand, presents a trading opportunity for Turkish suppliers. With a 42.4% YoY price increase, traders can capitalize on the Russian market. However, risks include regulatory changes and potential fluctuations in demand. Turkish suppliers can mitigate risks by closely monitoring regulatory developments and implementing agile supply chain strategies.

Brazilian Chicken Exports Surge in 2023 Despite Price Challenges, Eyes Growth in 2024 with Renewed Russian Quota

As of December 8, 2023, Brazil has exported over 4.533 million metric tons (mmt) of fresh chicken meat, reflecting a 2.5% YoY increase, with the year's total expected to surpass 4.425 mmt. Notably in W50, the volume of shipments reached 152 thousand metric tons (mt), indicating a robust 57% YoY surge, averaging over 25 thousand mt daily. Projections for end Dec-23 suggest shipments exceeding 500 thousand mt, potentially elevating total 2023 exports to nearly 4.9 mmt, marking a substantial 10% YoY increase. However, a challenge arises with the average price of USD 1,750 per metric ton (mt), reflecting a 12.6% YoY reduction and a 1.2% month-on-month (MoM) decrease, reaching its lowest point in almost two years. Despite this, there is a positive trend with foreign exchange revenue, which is expected to significantly increase, surpassing both the values from the previous month and those recorded in Dec-22.

The Russian Government's announcement of renewing the quota for total imports of 364 thousand mt of zero-tariff poultry meat is seen as a significant opportunity for Brazilian chicken meat exporters in 2024. The quota includes 250 thousand mt for carcasses, legs, and boneless cuts, 100 thousand mt for boneless products, and 14 thousand mt for whole turkey and carcasses. Outside the quotas, a 65% import tariff applies. From Jan-23 to Nov-23, Russia imported 43.6 thousand mt of Brazilian poultry products, marking a robust 44.2% YoY increase and generating USD 81.2 million in revenue for the year.

Actionable Recommendations for Brazilian Market

Despite challenges in average prices, Brazilian chicken exports are booming, especially with renewed Russian import quotas. Traders can leverage this growth opportunity but should be cautious about pricing dynamics. Mitigate risks by diversifying export destinations and staying informed about changes in the quota system and market conditions.

Türkiye's Poultry Industry Shows Robust Growth in Oct-23

The Turkish Statistical Institute (TÜİK) shared the Oct-23 Poultry Production data. In Oct-23, chicken egg production in Türkiye demonstrated a YoY increase of 3.8%, reaching 1.83 billion units, while the number of slaughtered chickens and chicken meat production saw growth of 0.7% and 1.4%, respectively. Turkey meat production also increased by 3.5% YoY. Over the Jan-23 to Oct-23 interval, chicken egg production recorded a 4.0% YoY increase, contrasting with a 6.8% YoY decrease in the number of slaughtered chickens. Chicken meat production showed a 4.4% YoY increase, while turkey meat production decreased by 13.0% YoY. On a MoM basis, chicken meat production surged by 6.6%, rising from 191 thousand mt to 204 thousand mt. Additionally, chicken egg production increased by 4.4%, climbing from 1.76 billion units to 1.83 billion units.

Actionable Recommendations for Turkish Market

Türkiye's robust poultry industry growth, particularly in egg and meat production, offers trading potential. Importers should consider capitalizing on increased demand in the Turkish market. Mitigate risks by diversifying product portfolios and staying updated on production trends. Implementing flexible strategies will be crucial to adapting to changing market dynamics.

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