Uruguay is marginal poultry meat exporter, but seeks to improve market access

RIO DE JANEIRO, BRAZIL – Between 2010 and 2014, 69% of Uruguayan poultry meat exports in value were bound for Venezuela. During this time, the average annual export rate stood at around US$24 million. Trade problems led to the termination of exports to this market.

The average annual export rate between 2015 and 2019 dropped to US$4 million. This level is lower than the previous 5-year period, excluding sales to Venezuela. Since then, the Middle East has been the main destination of Uruguayan poultry in international markets.

In addition, the basket of products exported by Uruguay is focused on whole chickens, resulting in a discrepancy between Uruguay’s supply and international demand.

International Market

Poultry is the world’s most consumed and traded meat. Below are some features of this dynamic market: It is the most traded animal protein in volume: In 2020, the international poultry meat market reached US$22.5 billion and 14 million tons traded, representing 22% of the international animal protein trade in value and 39% in volume.

This places it as the most traded protein worldwide in terms of volume and the third in terms of value.

It is the most consumed animal protein: According to USDA, the average per capita consumption of poultry meat worldwide in 2020 reached approximately 13 kg. This is 3% higher than pork and 68% more than beef.

Low relative price: The high level of demand for poultry meat worldwide is partly explained by its lower relative price compared to other animal proteins. The average export value per ton of poultry meat stands at around US$1,300. This is a fraction of the price of beef and has experienced a double whammy leading to lower relative prices: in relation to international inflation and also to the price of other animal proteins.

Growing trend in marketing and consumption: the volume of poultry meat marketed worldwide has grown at an average annual rate of 2% in the past decade. The growth rate of poultry meat consumption is higher than that of other animal proteins. The international poultry meat market is more concentrated in terms of supply than demand. Four exporters supplied 75% of the world market by value in 2020: Brazil, the United States, the European Union and Thailand.

On the demand side, 19 importers accounted for this share. By way of comparison, to reach similar figures for 75% of the beef market, 7 exporters and 10 importers are required. In terms of traded products, cut-up chicken accounts for 80% of world trade, while whole chicken accounts for only 20%.

Moreover, the cut-up chicken segment has grown by 40% in value between 2010 and 2019, while whole chicken reduced its traded value by 10%. Poultry cut-up allows countries to optimize their supply and consumption in terms of specific cuts.

Market access

INAC has developed a Market Access Index (MAI). It awards scores between 0 and 100 to exporting countries. An exporter scores 100 points when it trades in all importing countries with all possible products. If the exporter fails to gain access to all importing countries and/or fails to place all products, the score will be reduced proportionally.

In terms of market access, Uruguay’s poultry meat situation merits the following comments:
Uruguay accesses 4% of the international poultry meat market. This is a low access level when compared with other countries in the region as well as with the other meat products exported by Uruguay. Brazil, Chile, Argentina and Paraguay access 84%, 46%, 37% and 15% of the market, respectively.

The national health authority manages to provide higher market access levels for other meat products: bovine offal accesses 32% of the international market, sheep meat 39% and beef 73%.

Geographically, access is concentrated in the Middle East. In terms of products, the majority of exports are of whole chickens, with the sale of cut-up products being infrequent.

This situation is the result of a deterioration process. In 2010, Uruguay exported to about a third of the import market. Between 2010 and 2020, relevant health authorizations were lost (Hong Kong and Saudi Arabia) and trade with markets that remain open (Russia, Venezuela, Vietnam, Ghana, etc.) was interrupted.