BRF expects Brazilian chicken exports to China & EU to resume within weeks

China and the European Union are set to resume purchases of Brazilian chicken products “in a matter of days or weeks,” after local authorities contained an avian influenza outbreak that triggered trade bans in the second quarter, food processor BRF said Friday, August 15.

The first commercial outbreak of avian influenza in Brazil in May prompted a series of export restrictions, which importers have gradually lifted as the world’s largest chicken exporter brought the outbreak under control. The government declared Brazil free of the highly contagious disease in June.

During a quarterly earnings call, BRF’s management said inventories had risen above desired levels due to export restrictions, a situation the company expects to resolve in the short term.

“When these two markets reopen, we will return to inventory levels closer to zero,” BRF CEO Miguel Gularte told an analyst during the call. “It is our philosophy not to hold stock without sales.”

BRF described China and Europe as “extremely important” markets. On Thursday, the company also welcomed the decisions by Saudi Arabia and Chile to resume purchases, citing official government announcements.

The company said it had redirected some chicken cuts normally sold to China to other markets. BRF’s poultry exports fell 5% in the last quarter, compared with a 15% decline in Brazilian exports overall.

BRF results beat expectations, boost shares

Goldman Sachs stated that BRF’s results were surprisingly positive, given the challenging environment. Shares rose nearly 4% around 1 p.m.

Genial Investimentos noted that despite the effects of avian influenza, BRF’s margins and earnings before interest, taxes, depreciation, and amortization (EBITDA) “exceeded expectations.” Executives also said lower grain prices, particularly corn, would reduce production costs and improve margins in the third and fourth quarters.

Source: Isto é Dinheiro

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