Chicken for sale in cages of São Paulo - Import tariffs exemptions
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China exempts 14 chicken firms from import tariffs

Feb, 15, 2019 Posted by datamarnews

Week 201908

China spared 14 Brazilian chicken companies from anti-dumping duties following months-long negotiations between the two countries. BRF and JBS are included on the list of firms. The country will continue to hold tariffs of between 17.8% and 32.4% for five years for companies not on the list, commencing from February 17. The listed firms must sell products above an undisclosed floor price to avoid the import tariffs.

The decision to lift tariffs on chicken comes at a time when China is suffering an acute domestic shortage, with prices hitting a record US$1.65 per kg. Production in China has dropped recently due to bans on the import of breeding birds from many suppliers affected by bird flu outbreaks, exhausting China’s domestic market. According to Reuters, the African swine fever outbreak also seems to have shifted China’s meat preference to chicken.

China’s chicken imports from Brazil are expected to rise by 10% despite the preliminary results of the dumping probe. However, the world’s largest chicken exporter, Brazil, does not lack competition in Chinese markets. The Asian giant opened its poultry market to Russia and lifted a ban on Thai chicken last year.

Brazil’s main exports to China are chicken feet, legs, and wings. The following graph shows Brazil’s chicken export trends in TEU to China in the last ten years against US$ FOB, based on DataLiner and Secex data: 

Note: The graph above is based on Secex maritime data which has suffered distortions for 2018Brazil’s SECEX foreign trade data system, usually classifies export and import data by transport type (Maritime/Rail/Air etc), however it has been impacted by the implementation of the new foreign trade system being utilized by the Ministry of Industry, Foreign Trade, and Services (MDIC).

Recently, Saudi Arabia placed a ban on five poultry plants, including BRF and JBS plants.  BRF SA has also recalled chicken produced between October and November last year in Dourados plant due to possible salmonella contamination.

 

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