Brazil wins WTO dispute with Indonesia on poultry exports
Brazil won a WTO dispute with Indonesia over poultry exports but there is no real chance that South American producer will access this market any time soon. "Indonesia is an important market, with more than 250 million Muslim majority inhabitants and growing per capita consumption. As a major producer and exporter, Brazil remains open to collaborating with the food security of this important market. , complementing the local production. We hope that Indonesia fulfils its obligations as a WTO member country," said Ricardo Santin, president of the Brazilian Animal Protein Association (ABPA), in a note. Earlier this year, officials in Jakarta allowed beef imports from Brazil in small volumes but with chicken, the situation is different as the country is confronted with oversupply in poultry.
From upstream to downstream, the Indonesia broiler business is possibly the most industrialized sector in livestock agriculture. The industry is dominated by a handful of large corporations that own the birds, feed mills, cooking operations, and transportation networks. These corporations do not, however, raise the chickens. Actually, all of Indonesia’s broiler chickens are raised by “growers” both independent and integrator farmers who operate under contracts with the large processing companies. Recently Indonesia’s poultry sector key data indicated that the number of broiler flock is about 3.50 billion, layer flock is about 200 million, and the breeding flock is about 24.80 million. Annual per capita chicken meat consumption is about 12.70 KG and egg consumption is about 80. Indonesia’s broiler meat production in 2010 is about 1.25 million tons and increased in 2017 is about 3.53 million tons (181.10% growth in 7 years period).
Indonesia’s poultry sector continues to demonstrate strong growth, despite industry reports of oversupply. The Government of Indonesia has taken some efforts to regulate the import of breeder stock in order to slow growth and strengthen prices, although the results are negligible. Based on data held by the Ministry of Agriculture until September 2019, the demand for broiler meat in 2019 is 3,251,745 tons or an average of 270,979 tons per month. Meanwhile, the supply for broiler meat in 2019 is 3,829,663 tons or an average of 319,139 tons per month. From these data, there is a surplus of 577,918 tons or 17.77% during the 2019 period.
The situation in the domestic market didn't change in 2020, millions of birds being culled to stabilize the price. Therefore, there is no real chance for Brazilian poultry to enter the Indonesian market at a moment when poultry production is exceeding levels of domestic consumption.
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