Brazil to increase its consumption of beef and poultry
Local demand for animal protein such as poultry and beef is expected to rise in Brazil on the back of improving economic growth. "The gradual recovery of Brazil's economy in 2019 is expected to boost local demand across a range of key agribusiness sectors, including beef and poultry. Meanwhile, for poultry trade-related issues will be decisive for the local sector's performance,” says Andy Duff, Head of RaboResearch F&A – South America.
Last year, a massive strike of truckers has blocked the local meat industry for a while but the effects were felt in time.
Although the decline in international oil prices at the end of 2018 has helped to bring local fuel prices down, the former government's hasty compromise with the trucking sector following last year's strikes has yet to turn into a clear long-term agreement, with consensus on all sides and a solid legal basis. “The uncertainty regarding road freight rates contributes to an ongoing general risk for Brazilian agribusiness in 2019. Given this continuing uncertainty, the threat of another round of freight disruption in 2019 cannot be ruled out,” added Mr Duff.
On the other hand, the EU placed a ban on several Brazilian poultry producers due to the "rotten meat" scandal and there is still uncertainty regarding the trade with Middle East countries as the new president, Jair Bolsonaro, mentioned the fact that he intends to move the embassy in Israel to Jerusalem from Tel Aviv.
The measure was criticized even by the president of Brazil’s poultry & pork exporters association ABPA, Francisco Turra, who describe it as "bad for exporters" due to the risk of losing some of their businesses to countries in the Middle East.
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