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Russia boost to send Brazil chicken exports flying

The boost to Brazilian broiler meat exports from Moscow's sanctions on rival origins will drive volumes above 4.0m tonnes next year, cementing the country's status as the world's top shipper.

Brazilian chicken meat exports will hit 4.02m tonnes in 2015, a jump of 11.8% on the record volumes of 3.60m tonnes expected for this year, the US Department of Agriculture bureau in Brasilia said.

Indeed, the increase will strengthen the country's grip as the top exporter, which had appeared to be weakening, with the gap over second-ranked US foreseen narrowing below 200,000 tonnes this year.

The prospect of a jump in exports is being underpinned in part by a weak Brazilian real, and lower feed costs which are supporting chicken producers' margins.

However, the bureau also flagged "higher world demand for Brazilian product, especially from the Russian Federation", which has turned to the South American country for supplies after imposing bans on food products from the likes of the European Union and the US, which have censured Moscow over its role in the Ukraine crisis.

'Additional market opportunity'

The bureau, highlighting "additional market opportunity for higher sales to the Russian Federation", said that, according to sources, 38 Brazilian slaughter plans were eligible to export broiler meat to Russia.

"This would allow Brazilian poultry processors to increase their supplies up to 30,000 tonnes per month early in 2015," the bureau said in a report.

This implies a potential for exports to Russia well ahead of the 60,000 tonnes shipped last year, and even the extra 150,000 tonnes outlined by Abpa, the Brazilian meat industry association.

It would also promote Russia to one of the top export markets for Brazilian chicken, behind the likes of Saudi Arabica, to which volumes in the first half of the year reached 319,000 tonnes, and Japan, at 194,000 tonnes.

Brazil has previously exported 300,000 tonnes of chicken in a year to Russia, according to Abpa.

Output surge

The extra exports would be backed by Brazilian broiler meat production seen rising 5.0% to a record 13.3m tonnes next year.

Brazil ranks third in world broiler meat production, behind the US and China, although output in the latter country has been badly affected by bird flu fears, and is seen by the USDA falling this year by 650,000 tonnes to 12.7m tonnes.

Brazilian producers "are likely to benefit from reduced production costs due to higher soybean and corn crops in the 2014-15 season", the USDA bureau said.

"The only constraint affecting next year's forecast is the slowdown in the growth path of domestic consumption due to the high level of indebtedness of Brazilian consumers, higher inflation, and higher competition from beef and pork."

The comments follow an estimate by JBS - the world's biggest meatpacker, which has expanded into Brazilian chicken through a series of acquisitions - that Russia's ditching of meat imports from the likes of Australia and the US would lift sales from the groups South American operations by $600m-800m.

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