Saudi proposal to reduce chicken shelf-life will impact exports – BRF

Saudi Arabia’s proposal to reduce the expiration date of whole frozen chicken and its parts will hit exports, said Brazil’s biggest chicken processor BRF.

Saudi Arabia on May 6 notified the World Trade Organization of its proposal to reduce the shelf-life of chicken exports from 12 to three months.

BRF CEO Lorival Luz said in a first-quarter earnings call on May 13 the company is still analysing the situation.

“That absolutely has an impact and could have a greater impact on our exports considering the time lag between production and outbound shipments and distribution of products,” said Luz.

“In the next few weeks we expect to have a position from Saudi Arabia, we expect to establish a conversation with their government and we expect to reach a compromise,” Luz added.

The CEO noted that all other exporting companies and countries will also be affected.

Brazil's companies exported 43.8 thousand tons of chicken meat to Saudi Arabia in February, an increase of 19.5% compared to the same month last year, according to industry body ABPA. 

All meats entering Saudi Arabia must be halal-certified. 

BRF MEASA general director Patricio Rohner said the logistics infrastructure would need to be addressed if the new requirements are to be met, considering the distance of around 1,000 km from Saudi Arabia’s main port to its key cities.

The impact of the new restrictions is also much broader than just on BRF in Brazil, as the company has halal facilities in Dubai and Turkey, said Rohner.

Saudi Arabia’s notification to WTO was dated the day after the Saudi Food and Drug Authority suspended imports from 11 poultry slaughterhouses in Brazil that mainly affected BRF competitor JBS.

Comments to Saudi Arabia’s WTO notification can be submitted until Jul 5.

BRF posted profit of 22 million reais ($4.17 million) for the first-quarter, compared to a loss of 38 million reais for the same period last year, on an 18.4% increase in net revenue to 10.59 billion reais.

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