Brazil reduces chicken breast offers to Mexico amid PACIC tariff uncertainty

Brazilian suppliers have reduced boneless chicken breast offers to Mexican buyers amid uncertainty over whether PACIC tariff benefits will be renewed beyond Dec. 31, 2026, with concerns that cargoes shipped in the coming weeks may arrive after the current duty-free regime expires.

The Program Against Inflation and Deficit, or PACIC, is a government-industry initiative aimed at keeping basic food prices affordable, according to Mexico's Ministry of Agriculture and Rural Development. The program reduces trade barriers, allowing Brazilian chicken to enter Mexico duty-free.

A Brazil-based trader said sales of boneless chicken breast to Mexico had slowed, with no new offers for shipments to the country received in the past two weeks.

The last shipments are expected by mid-November, as cargoes loaded later may not arrive in Mexico before Jan. 1, 2027, according to the trader.

"Production for the next two weeks has already been sold," the trader said.

Forward sales, higher prices

Uncertainty over PACIC's renewal prompted some Brazilian packers to accelerate sales to ensure shipments to Mexico were completed in 2026.

A Brazilian packer said all sales for shipments scheduled through November were already finalized in September.

"We brought forward our sales knowing the difficulties we may face," the packer said.

However, market participants who did not advance their sales were later able to secure higher prices, according to a Brazilian exporter.

Sale prices to Mexico reached $2,800/metric ton in October for November shipment, rising from $2,650/mt for trades concluded in September for the same shipment month, according to the exporter. Increased demand from Mexican importers contributed to the price rise, the exporter said.

Brazil-Mexico trade strengthens

Brazil's poultry shipments to the Mexican market totaled 243,829 mt in 2025, accounting for 4.6% of total Brazilian poultry exports during the period, according to data from the Brazilian Foreign Trade Agency, or Secex.

Shipments reached 170,722 mt in the first nine months of 2026, accounting for 3.9% of Brazilian poultry exports during the period, Secex data showed.

A second Brazilian exporter said Mexico also served as an important alternative market in 2026, after the outbreak of conflict in the Middle East curtailed Brazilian poultry shipments to countries in the region.

The Mexican market absorbed volumes that would otherwise have been shipped to key Middle Eastern destinations, the exporter said.

Outlook for 2027

Market participants expressed mixed expectations regarding the future of chicken meat tariff benefits under PACIC in 2027, including the possibility of a return to a quota system.

A second Brazil-based trader said Mexico has strong demand for imported chicken breast and has increasingly turned to Brazil as an alternative to US supply.

Platts, part of S&P Global Energy, assessed jumbo boneless skinless breasts ex-works US Southeast at $1.16/lb on Oct. 14, up 6 cents/lb from the previous assessment.

A third exporter said a potential quota system for chicken meat could follow a model similar to that adopted for pork and beef, benefiting mainly large Brazilian packers.

A fourth exporter said the outlook for the 2027 rules remains uncertain, but noted that the slowdown in new sales was already a reality.

Market participants expect the Mexican government to publish new rules for 2027 in late December or early January.