Brazilian poultry output set to increase by 5% in 2016

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BRASILIA: Broiler production in Brazil looks set to increase by 5% in 2016 to nearly 13.5 million metric tons. This is a result of stable feed costs and higher exports due to the depreciation of the Brazilian currency and the new market opportunities, a recent USDA GAIN report suggests.
Brazil has seen a higher world demand for its poultry this year, especially after the impact of the Avian Influenza in several countries, notably the US. In addition, a devaluation of the Brazilian currency of nearly 30% this year combined with a decline in feed costs makes the Brazilian product highly competitive in the world market.
The main constraint affecting next year’s forecast is the current economic recession of the Brazilian economy. However, because of higher beef prices, chicken remains the most affordable animal protein in the country as consumer purchasing power is affected by rising inflation. The high level of debts within Brazilian consumers in general is also prompting the slow growth path in domestic demand. Domestic consumption of broiler meat in 2016 is however projected to increase by 2% despite the current economic recession in Brazil
The average cost of broiler production in 2016 is forecast to decline by 3-4% due to higher availability of feed at stable prices. Items pressuring production costs in 2015 are electricity, labour and transportation, while costs of nutrition and day-old-chicks are declining. These costs of production are for Parana state, the largest broiler producer in Brazil.
In terms of exports the report forecasts broiler exports in 2016 to expand by 5% over this year´s record. The growth in exports will likely be driven by a continued devaluation of the Brazilian currency combined with the continued impact of the Avian Influenza in several world markets, which is benefiting Brazilian exporters. In addition, the Brazilian government has recently opened new markets for Brazilian broilers, such as Pakistan, Malaysia, Myanmar, and Mexico (re-authorisation for exports until 2016).
Brazil is now able to export broilers to 158 countries, but 70% of all poultry exports are concentrated in 10 countries. Other market access work is being conducted in several countries, of which Indonesia is one of the most important, despite the WTO case against that country.