Saudi Arabia suddenly suspends poultry meat imports from JBS and other Brazilian companies

RIO DE JANEIRO, BRAZIL – Saudi Arabia, Brazil’s second largest buyer of chicken meat, has suspended imports of the protein from 11 Brazilian plants, 7 of which belong to the JBS group (JBSS3), at a time when the Arab country is seeking to increase domestic production to supply itself.

The Brazilian government received the news “with surprise and dismay” and intends to take the case to the World Trade Organization (WTO) should the imposition of an undue restriction be evidenced, according to a joint statement issued by the ministries of Agriculture and Foreign Affairs on Thursday.

The statement said the decision only featured in the new list of Saudi Food and Drug Authority (SFDA), the Saudi government’s health authority, the plants in Brazil authorized to export to the country, without further details.

The measure comes into force from May 23rd.

“There was no prior contact from the Saudi authorities, nor were there any motivations or justifications to support the suspensions,” the statement read, noting that, so far, only Brazil has been subject to an update in the list of poultry meat exporters.

The SFDA document, available on its website, states that 2 of the suspended plants belong to JBS Aves, located in Passo Fundo (RS) and Montenegro (RS). Another 5 are owned by Seara in Brasilia (DF), Campo Mourão (PR), Amparo (SP), Ipumirim (SC) and Caxias do Sul (RS). This leaves the JBS group out of this market’s poultry segment.

In a statement, the company said it has approached the Saudi health authority for dialogue and to understand the reasons for blocking shipments of the protein. “The production previously destined for Saudi Arabia has now been redirected to other markets,” said the company, one of the world’s largest meat processors.

The Vibra Agroindustrial group had 3 plants suspended and Agroaraçá had 1, according to the document.

Competitor BRF said through its press office that no plant was suspended in this SFDA update. However, the company had temporary suspensions imposed last year for the Saudi market in 2 plants.

Now, the Saudi Arabian market continues to be accessed only by BRF, with 4 plants in Brazil, and by another 5 smaller exporting companies, when compared to the giants in the sector.

The Brazilian government said it has initiated contacts with Saudi authorities and that country’s embassy in Brasilia to clarify the incident. “All bilateral and multilateral avenues will be employed with a view to the prompt resolution of the issue,” the ministries’ statement stressed.

“Brazil reiterates the high quality and sanitary standards followed by our entire chain of products of animal origin…There is confidence that all sanitary requirements established by destination markets are fully met.”

The Brazilian Association of Animal Protein (ABPA) said in a statement that it is supporting the Brazilian government in seeking further details about the “surprising unilateral decision” taken by Saudi authorities, with the suspension of chicken meat exporting plants.

The director of Scot Consultoria, Alcides Torres, recalled that the Saudis had previously expressed their intention to produce chicken domestically, which suggests that the decision without greater motivation may be a protectionist measure.

“Everyone is surprised, it is too early to say anything, but this intention to produce chicken in Saudi Arabia, this is already public,” he said.

The suspensions announced to Brazil occur the same week that Saudi company Almarai, one of the largest in the country, announced an investment of US$1.8 billion to double its chicken production.

Data from ABPA shows that Brazilian chicken exports to Saudi Arabia reached 120,800 tons in the first quarter this year, up 8.5% compared to the same period in 2020, and represented 12% of total exports from January to March.

The market was once the main destination for Brazil’s protein and lost its position to China in 2019, with the outbreak of African swine fever in the Chinese herd.

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