Saudi ban impacts 5 Brazilian poultry plants

Brazil’s chicken export industry continues to face obstacles as its largest fresh and processed poultry destination, Saudi Arabia, has placed a ban that impacts 5 poultry plants currently exporting to the country, including BRF and JBS plants. Saudi Arabia have authorised just 25 Brazilian chicken plants to export to the country. These 25 meat packers account for 63% of the total poultry exported to Saudi Arabia.

The Saudi decision came just a day after BRF and others had managed to resolve an anti-dumping dispute with China. The Brazilian Animal Protein Association (ABPA) said the reason is somewhat technical and gave assurances that all would be done to revert the decision. The association also denied reports that the ban was a retaliation by Saudi Arabia to the Bolsonaro government’s intention of moving the Brazilian embassy from Tel Aviv to Jerusalem.

ABPA data shows Brazil exported 433,500 tons of poultry products to Saudi in 2018, accounting for 11.8% of all such exports from Brazil. To illustrate, DataLiner shows Brazil’s top chicken export destinations on a year-on-year comparison for the last three years, as below:

BRF is optimistic that chicken exports to Saudi will be restored to previous levels within three months. The suspended BRF plant, known as Lajeado, previously exported an average of 6,500 tons of poultry per month.

Arab nations, including Saudi Arabia, are the most significant destinations of Brazil’s halal poultry products. The country’s biggest halal certification company, FAMBRAS Halal, estimated that this niche meat industry generated around US$5bn last year, up around 10% YoY, despite the truckers’ strike and many other embargoes. Recently the halal industry has been facing renewed uncertainty due to the controversy surrounding the relocation of Brazil’s embassy within Israel.

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