Brazil chicken exports slump as EU bans weigh: trade group

SAO PAULO (Reuters) - Brazilian chicken exports fell sharply in the five months through May as the world’s largest exporter was hit by trade embargoes by the European Union and a decline in sales to countries such as Saudi Arabia and Russia, trade group ABPA said on Thursday.

FILE PHOTO: Chickens are pictured at a poultry factory in Lapa city, Parana state, Brazil, May 31, 2016. REUTERS/Rodolfo Buhrer/File Photo

The volume of exported chicken in the period was 1.6 million tonnes, down 8.5 percent from 1.75 million in the same months of 2017. ABPA said export revenue fell 12.3 percent to $2.6 billion as a result of the fall in sales.

Shipments to the EU dropped the most among Brazil’s 150 clients, by 40 percent, ABPA said. Brazil sold 92,500 tonnes to the EU in the period, down from 151,800 tonnes.

The EU in April suspended imports of Brazilian meat products, mostly poultry, a decision affecting 20 plants in the South American nation, 12 of which operated by BRF SA.

The Brazilian government had preemptively halted exports from nine chicken processing plants.

Brussels linked the EU ban to “deficiencies detected in the Brazilian official control system” following a corruption investigation implicating Brazilian food companies and health officials, whom federal prosecutors accused of colluding to evade quality and safety checks.

In 2017, chicken sales to the bloc represented about 7.5 percent of Brazil’s total.

ABPA said in March Brazil and the EU had been “long term trade partners,” with the South American nation selling more than 5 million tonnes worth of chicken products to the bloc over 10 years.

Export volumes could drop further after an 11-day truckers strike last month crippled Brazil’s roads and severely disrupted the flow of goods to local markets and ports, ABPA said.

In May alone, there was a 4.7 percent fall in chicken volumes shipped out of Brazil, to 333,200 tonnes, ABPA said.

The effects of the strike will be reflected in June export figures, according to the trade group.

Reporting by Ana Mano; Editing by Dan Grebler and Grant McCool