Chicken price hike feared as Brazil halts exports due to bird flu outbreak

A shopper looks at chicken products at a major supermarket in Seoul, Dec. 4, 2023. Yonhap

An outbreak of bird flu at a Brazilian poultry farm — the source of over 80 percent of Korea’s imported chicken — has sparked concerns throughout the chicken and food service industries here.

Following the decision by Brazil to suspend chicken exports for 60 days, the Korean government is weighing measures such as increasing imports from other countries and bringing in fertilized eggs for domestic production.

Brazil has confirmed its first-ever case of highly pathogenic avian influenza, more commonly known as bird flu, at a commercial poultry facility, raising concerns about potential disruptions linked to one of the world’s largest chicken exporters.

Brazilian authorities said Friday (local time) that the virus was detected at a farm in Montenegro, a city in the state of Rio Grande do Sul, which produces 60 percent of Brazil’s total chicken output.

While officials stressed that the virus is not transmitted by consuming chicken or eggs, they announced the launch of an emergency response plan aimed at safeguarding production capacity, stabilizing supply and protecting food security.

Reuters reported that Brazil’s Minister of Agriculture, Livestock and Food Supply (MAPA) said protocol requires a 60-day export suspension to countries including Korea, China and the European Union in the event of a bird flu outbreak. The minister added that Brazil is now waiting for formal notification from those governments.

In response, Korea's Ministry of Agriculture, Food and Rural Affairs announced Saturday that it will suspend imports of Brazilian eggs, poultry and related products, following Brazil’s confirmation of the outbreak and its official report to the World Organisation for Animal Health.

Brazil is Korea’s largest chicken supplier. According to the ministry, Korea imported 158,000 tons of chicken from Brazil last year, accounting for 86.1 percent of the country’s total chicken imports. Out of the 801,600 tons of chicken consumed domestically last year, 19.7 percent came from Brazil.

Korea’s agriculture ministry convened an emergency meeting with poultry processors and distributors to assess inventory levels and develop countermeasures in response to the looming supply disruption. The ministry called on industry stakeholders to release stockpiled chicken and cooperate with efforts to stabilize the market.

"We have no choice but to diversify import sources or ramp up domestic production," a ministry official said.

"Industry data suggests there is enough Brazilian chicken in stock to last about two months. In the meantime, we’re considering measures such as imposing import quotas to increase imports from other countries and bringing in fertilized eggs for domestic hatching to boost supply," the official added.

A prolonged suspension of Brazilian chicken imports could lead to supply shortages and ultimately drive up prices.

Concerns are particularly high among some fried chicken franchises that rely on Brazilian imports for boneless products, as they brace for potential disruptions in supply.

While the industry estimates that current inventory levels of Brazilian chicken may last about two months, some say the available stock may not be sufficient to fully cover demand during the import halt.

The food service sector, which also depends heavily on Brazilian chicken, is also closely monitoring the situation.

A worker at a catering company said the firm is preparing to reduce chicken-based menu items and substitute them with other protein sources such as tofu and eggs.