April 3, 2018 / 7:49 PM / 3 months ago

Brazil's chicken exports drop as trade bans, high costs weigh - ABPA

SAO PAULO (Reuters) - Brazil’s fresh chicken exports fell 5.6 percent by volume in the first three months of the year due to trade bans and higher production costs, meat trade group ABPA said on Tuesday.

Fresh chicken exports totaled 1.017 million tonnes in the period, down from 1.078 million tonnes in the same months last year. In financial terms, exports fell 12 percent to $1.605 billion, ABPA said.

ABPA said sales of salted meats, the largest category of exports to Europe, recorded losses of close to 50 percent in volume terms in March.

“This year was a promising one for the sector, but the combination of rising production costs and a self-imposed export ban to the European Union had a negative impact,” Francisco Turra, head of ABPA, said in a statement.

Last month, Brazil’s government halted exports to the EU from BRF SA, the country’s largest chicken processor, after allegations against the company emerged in an on-going food safety probe. Other companies have also been barred from exporting for not meeting certain EU rules, according to the agriculture ministry.

The discussion with the European Union regarding chicken exports “is a matter of product classification, not food safety,” ABPA said. The impasse “puts jobs at risk at a crucial moment for the country’s economic recovery,” Turra said.

BRF SA and privately owned Cooperativa Central Aurora Alimentos, said they would put workers on paid leave to adjust production to capacity.

A rise in feed costs and a Russian trade ban on Brazilian pork over feed additive concerns are also weighing on the industry.

The Agriculture Ministry did not have an immediate comment on the state of talks with European authorities, who are visiting Brazil on Tuesday, regarding food safety and the possibility of removing exports barriers.

ABPA said exports of fresh pork also dropped by almost 16 percent in relation to last year, to 129,300 tonnes in the first three months of 2018, as companies are still reeling from the Russian ban from Dec. 1.

One development aiding the industry is China’s steadily rising level of purchases of pork from Brazil, becoming its main market, a trend likely to continue after Beijing imposed duties on U.S. pork exports to China.

Reporting by Ana Mano; Editing by Lisa Shumaker

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