World crazy for chicken is losing its biggest supplier
In the US, the strong demand and limited supplies already have been pushing up prices. Chicken breasts cost about US$3 a kilo, the highest since July 2022, according to the USDA.
Commercial farms in Brazil had so far been insulated from the virus, which has killed tens of millions of birds globally recently. Roughly two-thirds of the estimated growth in global chicken exports this year were anticipated to come from Brazil, the USDA data show.
That was until last week, when the virus was discovered at a commercial flock in the southern state of Rio Grande do Sul. And there are concerns it could spread, with suspected cases in neighbouring Santa Catarina and the northern state of Tocantins still under investigation.
China and South Korea were some of the most affected buyers. The nations, which rely on Brazil for more than 70% of their imports, have both implemented nationwide bans. Countries that implemented only partial bans such as Saudi Arabia are likely to fare better.
South Korea's Broiler Association requested affiliated companies to boost production and said the chicken industry will make 'every effort to stabilise supply and demand,' according to a statement. Meanwhile, the nation's agriculture ministry asked importers and retailers to release their inventories while it explores ways to increase domestic supplies.
The Philippines, which relies on Brazil for roughly half of its chicken imports, will seek to buy meat from the US, Poland and Hungary, a government official said earlier.
China may see higher prices in the short term, particularly for chicken feet and wings, while the upside seems to be limited because of adequate supplies, Sun Yanan, an analyst with Chinese industry consultant SCI99, wrote in an analysis.
The scale of the disruptions will depend on Brazil's ability to prevent the spread of the deadly virus. Brazil's southern region contains about 75% of its chicken production for export.
Brazil last halted shipments to China and Europe in July and restricted sales to other countries after detecting Newcastle disease at a commercial farm. But the bans were quickly reversed.
'The solution for importers is to take a more measured approach on the protective measures,' said Alcides Torres, founder at consulting firm Scot Consultoria. 'There is no other supplier as Brazil.'
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