Brazil should end 2004 with one-third of the world's poultry market, estimated at about 6 million tonnes, after bird flu ravaged Asian producers earlier this year, a Rabobank sector specialist said.
Brazil became the world's largest poultry exporter in August, overtaking the United States.
Gordon Butland, Dutch Rabobank's world head of poultry, told Reuters that Brazil had many competitive advantages which would allow it to expand sales abroad to control a third of the world market. But it was too dependent on exports.
"Brazil is very dependent on the foreign market," said Butland. "It earned $1.7 billion (in trade revenue) until August. Imagine if there were an outbreak of bird flu here. Overnight, Brazil would lose its slice of the market."
Butland, who is responsible for analysing investment possibilities and loans at Rabobank for the world poultry industry, was speaking on the sidelines of an animal feed industry symposium.
It would be healthier if Brazil paid more attention to its domestic poultry market, he said, adding that the local market could grow if current economic indicators continue to show a positive trend.
"Studies show that in emerging countries there is a direct relation between GDP and animal protein: when one grows, consumption of the other also grows," he said. "Since poultry is the cheapest among meats, it will tend to grow first."
Butland said the recent purchase of local meats producer Seara by US grain trader Cargill Inc. will force the other large players in the sector to rethink their strategies.
"Now there are only Sadia and Perdigao (that can be bought by foreign capital). They are publicly traded companies, which can complicate an acquisition," he said, adding that the local meats industry had lots of smaller, regional competitors which would also complicate the entry of a foreign company.
"The biggest four have 25 percent of the market, while in the US the 10 biggest have 80 percent of output," he said.
As for the ongoing Asian bird flu outbreaks, the specialist said it's difficult to see an end to the crisis, but said he believed Brazil would eventually lose market share when the disease was finally brought under control.
Japan would return to being supplied by Thailand.
"They take six days to deliver a product to Japan. Brazil takes one month," he explained.