COUNTRY REPORT ▶▶▶
Saudi Arabia’s changing poultry landscape
The Saudi Food and Drug Authority (SFDA) recently implemented several new measures that will significantly affect the Saudi import poultry market. Meanwhile, local poultry production is also being encouraged.
BY NATALIE BERKHOUT A
imed at reducing the Kingdom’s dependence on oil, to help diversify its economy and as part of its Saudi Vision 2030 agenda, the Saudi Arabia Minis- try of Environment, Water and Agriculture (MEWA)
is encouraging local producers to drastically increase produc- tion. The country produced 900,000 million metric tonnes (mmt) of chicken meat in 2020, accounting for 60% of domes- tic consumption with estimates of around 1.55 mmt a year. MEWA expects local production to account for 80% by 2025 and 100% by 2030. To achieve this, the ministry is offering lo- cal chicken meat producers various incentives, including up to US$ 187 million annually as a direct production-based sub- sidy. Almarai, the largest Saudi dairy farm and its third largest chicken meat producer, recently announced a massive poul- try expansion plan, costing US$ 1.8 billion, which will double its poultry production over the next five years. Under its Vison 2030 plan, the Saudi government is encouraging foreign companies to invest in the Saudi market, especially poultry farms. In return, Saudi Arabia offers 100% ownership to ‘local’ producers and access to the direct production-based subsidy that is also offered to local poultry farmers.
Poultry trade disruptions In 2020, Saudi Arabia imported a total of 652,283 million tonnes (mt) of chicken meat and products, of which Brazil supplied 72% (467,522 mt). In May, the SFDA suspended 11 Brazilian poultry plants from exporting to Saudi Arabia. This accounted for 60% of Brazil’s poultry exports to the Saudi market. The three Brazilian poultry companies affected by the import ban – JBS, Vibra Group (of which Tyson Foods owns 40%) and Agroaraca Industria De Alimentos Ltda (Nicolini) – lost their most important market in the Middle East. Accord- ing to a USDA report, the SFDA has not provided key
information about the ban, such as the reasons for the suspension or how long it will last. Meanwhile, in early June 2021, the SFDA temporarily suspend- ed poultry imports from Ukraine’s largest export facility, PrJSC Myronivska Pticefabrika (MHP). Ukraine exported 84,221 mt of chicken meat to Saudi Arabia in 2020, with MHP being the dominant supplier. In June, the SFDA also temporarily banned imports of poultry meat and eggs from three French provinces due to the outbreak of the HPAI. France exported about 73,000 mt of chicken meat to Saudi Arabia in 2020.
Investment by Brazil Meanwhile, Brazil’s largest chicken meat processor, BRF SA, re- cently invested in two poultry meat processing facilities in Saudi Arabia. In October 2019, the company announced an agreement with the Saudi Arabia Ministry of Investment to establish its fully-owned poultry meat processing plant at a total cost of US$ 120 million. The firm’s Saudi plant is expected to produce around 50,000 mt of poultry meat annually. On 7 May 2020, BRF SA purchased Vita Food Company (a Dam- mam, Saudi Arabia-based meat processing company) for nearly US$ 8 million. BRF SA also plans to invest US$ 7.2 mil- lion in expanding the Vita plant’s existing processing capacity by more than four-fold. Currently, five Brazilian companies with a total of nine facilities are eligible to export poultry meat and products to Saudi Arabia, with BRF SA the main sup- plier, with four of those facilities. On 2 October 2020, the SFDA temporarily banned two of the company’s facilities from ex- porting to the Kingdom, with the suspension still effective. This information was extracted from a USDA GAINS report.
▶ POULTRY WORLD | No. 7, 2021 13
Local poultry producers in Saudi Arabia are being encour- aged to drasti- cally increase production.
PHOTO: HANS PRINSEN
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36
