Brazil's BRF may return to European market sooner due to swine fever
Ana Mano, Reuters
May 10, 2019
SAO PAULO (Reuters) - BRF SA, the world’s largest chicken exporter, believes Europe could lift an embargo affecting a dozen of its plants sooner than anticipated because of the global meat supply imbalance deriving from a deadly hog disease in China.
In remarks to journalists regarding a third straight quarterly loss, BRF Chairman Pedro Parente said demand for meat products will grow globally, which could lead Europe to relax restrictions on Brazilian plants.
“I would not be surprised if European authorities sped up approval of Brazilian plants,” Parente said. In a call with analysts, the company had said it is ready to cater to more demand from Europe should it reopen its markets sooner.
Rising feed costs led to the latest quarterly loss, but BRF executives said the cost of feed is likely to fall as a result of ample corn supplies in Brazil, which will be reflected in results during the second half of 2019.
BRF posted a first-quarter net loss of 113 million reais ($28.6 million) from ongoing operations. A one-time 863 million reais non-cash charge stemming from asset sales in Argentina expanded the loss for the quarter to 1 billion reais.
BRF shares fell almost 3 percent to 29.84 reais in early afternoon trading.
The food processor also reported a 7.3 percent drop in the total volume of products sold, an 80,000-tonne drop in the quarter, which was compensated by a 13 percent rise in the price of its products.
The price increases helped lift net revenue for the quarter by almost 5 percent to 7.4 billion reais. But the sharp rise in feed prices thwarted the company’s turnaround efforts.
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