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Industry Union Sees Positive Outlook

11 January 2012, at 10:11am

BRAZIL - Studies by the Brazilian Poultry Union (UBABEF) indicate that the Brazilian production of poultry is expected to reach 13.084 million tons in 2011, almost 6.9 per cent more than the total produced in the previous year.

Production for the domestic market will represent 69.9 per cent of this production, an increase of 8.3 per cent compared to 2010.

It is expected that exports will total 3.937 million tons, 30.1 per cent of total production, and an increase of 2.7 per cent compared to 2010.

CEO of UBABEF, Francisco Turra says the outlook is positive. For the domestic market this increase represents a change in consumer habits - with chicken being a preferred choice - not just a cheap alternative to other proteins.

Despite increasing domestic production, the industry still faces high taxes of nine per cent on average. Mr Turra says that these rates are much higher than tax rates in other countries, and reduce profit margins for producers through increased production costs, especially with high corn prices.

For exports, Mr Turra explains the behaviour of the exchange rate over 2011 (with the dollar reaching R$ 1.53) contributed to a further decline in profit margins for agribusinesses.

"In addition, some markets such as Russia, Egypt and Turkey recorded sharp declines, which prevented an even better performance for exports," he said.

Mr Turra said that the excellence of the poultry industry was crucial to overcoming obstacles in 2011.

"The past year has been complicated with a lot of instability. Were it not for the high professionalism of our industry, we would have a year of heavy losses. The Brazilian poultry industry must be competitive to keep the lead and this depends not only on the supply chain, but other factors and the government."

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