Saudi Arabia halts trade 11 Brazilian poultry processors

On 6 May, Saudi Arabia suspended poultry exports from 11 Brazilian poultry processing plants, 7 of which are JBS plants. The Arab country is the second main destination for Brazilian chicken exports. The measure will come into effect on 23 May.

The Saudi Food and Drug Authority (SFDA), the Saudi government health authority, announced the measure in a note about Brazilian plants authorised to export to the country, but provided no further details.

Since 2016, industry specialists have noted that Saudi Arabia is steadily increasing its domestic chicken production in order to reach self-sufficiency. The suspension of the Brazilian plants was announced in the same week that Saudi company Almarai, one of the largest in the country, announced a US$ 1,8 billion investment to double its chicken production.

According to a joint note from the Brazilian ministries of Agriculture and Foreign Affairs, Brazil intends to take the case to the World Trade Organization (WTO), should the suspension impose an undue barrier.

“There was no prior contact from the Saudi authorities, nor did they present any reasons or justifications to justify the suspensions. All bilateral and multilateral channels will be employed to prompt a resolution of the issue,” the ministries’ statement read.

No trade between JBS Group and Saudi poultry market for now

The SFDA document, available on the SFDA website, indicates that 2 of the suspended plants belong to JBS Aves and 5 belong to Seara. As a result, there is no trade between JBS Group and the Saudi poultry market for now.

JBS has already reached out to the SFDA to talk and understand the reasons behind the suspension. “Production previously intended for Saudi Arabia has already been redirected to other markets,” JBS said in a note.

In addition to the JBS plants, the document announced that 3 Vibra Agroindustrial plants and 1 Agroraçá plant would be suspended. At present, the only poultry entering the Saudi market from Brazil comes from BRF (4 plants) and from 5 other smaller exporting companies.

ABPA: “A surprising unilateral decision”

In a note, the Brazilian Animal Protein Association (ABPA) that it supports the government in their search for more details about the “surprising unilateral decision”.

In the first quarter of this year, Brazilian chicken exports to Saudi Arabia totalled 120,800 tonnes, a 8.5% increase compared to the same period in 2020.

Brazil’s chicken exports to Saudi Arabia reached 120,800 tonnes in the first quarter of this year, an increase of 8.5% compared to the same period in 2020, and represented 12% of the total poultry exports shipped from January to March.

The Saudi market used to be the main export destination for Brazilian poultry, but in 2019, China became the biggest importer of Brazilian poultry due to the impact of African Swine Fever on the Chinese herd.