Middle East chicken prices slump again on summer demand, excess Brazil supply

Middle East chicken breast prices have declined 9.8% over the last two weeks as weak seasonal summer demand combines with excess supply from Brazilian exporters unable to access European markets.

Market activity in the UAE has remained subdued throughout July and early August. Peak heat affects working hours and logistics, many businesses operate on reduced schedules, and school holidays dampen consumption patterns across the region during the traditional summer slowdown period from July 1 to Aug. 31.

The seasonal nature of the current decline contrasts with panic-driven selling in July, when Brazil restarted exports after a bird flu outbreak in May.

Brazilian poultry supply remains banned by the EU market pending further inspections, leading to excess supplies flowing to Middle East markets that mostly remain open. This shift has added further pressure to Middle East prices that were already weighed down by weak seasonal demand.

Market Pressure

Market activity in the UAE has remained subdued throughout the period, with first indications of the wide gap between sellers' offers around $3,200/mt and buyers' bids near $2,900/mt limiting liquidity in late July. According to market sources, the most recent traded prices for Brazil-origin poultry for September loading to the UAE ranged $2,750-$2,850/mt for breast meat, skinless, boneless, depending on different brands.

The summer slowdown has been exacerbated by competition from alternative origins, particularly Thailand and China. According to customs export data provided by the relevant countries, Thai chicken exports to the UAE rose sharply to 2,942 mt in May, from 1,626 mt in April, while Chinese chicken exports climbed to 3,227 mt in June from 1,745 mt in April.

Domestic or Ex-w cold store prices for Brazilian breast meat in the UAE were heard at AED 12.50/kg or $3.40/kg, while Chinese product was reportedly sold as low as AED 9/kg or $2.45/kg, highlighting the competitive disadvantage facing Brazilian suppliers.

Ukrainian suppliers have confirmed they are not currently exporting to the Middle East, with volumes redirected to EU and UK markets where conditions are reportedly more favorable. This has further concentrated Brazilian supply pressure on Middle East destinations.

The EU's continued restrictions on Brazilian chicken imports have created uncertainty in global trade flows. Brazil exported 5 million mt of chicken meat in 2024, with China and EU imports accounting for 11.2% and 6.7% of total volumes, respectively, according to Brazilian Foreign Trade Agency data.

"The volume of breast meat can't be fully absorbed by the Middle East and North Africa," a Brazilian market participant said July 28. "To manage this, some producers are said to be reducing day-old chick placements to help ease future supply without destabilizing the market."

Brazilian producers have responded to the supply challenges by adjusting production schedules. According to market participants in Brazil, suppliers are reducing day-old chick placements to align output with current demand levels and prevent further market destabilization.

Platts assessed CIF Middle East chicken breast boneless skinless at $2,750/mt on Aug. 5, down from $3,050/mt on July 21.