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Red Tape a Main Factor in Brazil’s Dismal Animal Feed Sector Growth

Brazil’s animal feed industry presented its results for the year of 2006. Below expectations, the sector should end the year with production of 48.4 million tons – growth of just 2.5% when compared to last year.

The forecast, according to Mário Sérgio Cutait, head of the National Union of Animal Feed Industry (Sindirações), had been for growth of 10%.

Among the reasons for the low growth is avian flu, which affected the Asian and European countries, and the cases of foot and mouth disease that arose in the Brazilian states of Mato Grosso do Sul and Paraná early this year.

Apart from that, Cutait recalled the bureaucratic problems that make it hard for foreign inputs to enter the country and also for the export due to delays of over thirty days in Brazilian ports.

The problem he calls "blackout of ports" is identified mainly in the port of Santos, the largest in Brazil and where 50% of the articles imported by producers in the sector and 43% of the exported products cross.

Another bottleneck for exporters is, as occurs in all sectors, the tax system. According to Cutait, in some sectors the volume of taxes is as high as 50% of the value of the product.

Still, the union is celebrating some good results. Exports, for example, should reach US$ 130 million, against US$ 120.4 million last year. The main export product is pet food. However, the sector trade balance is still out of proportion: for the US$ 130 million in products exported, US$ 400 million of inputs were imported.

"But this has been changing," stated Cutait. Currently, 80% of the sector production is consumed in Brazil. The remaining 20% is exported to over 40 countries.

Pet food was also the sector that grew most in terms of production in 2006, 7.58% more than in 2005. And pork feed grew 6%. According to Cutait, the forecast is that in 2007 the other sectors like poultry feed and dairy cattle feed should grow 7%.

To the president of the Sindirações, the best way to make the sector grow is increasing the population’s consumption of food.

"Today, Brazilians eat on average 90 kg of meats a year, whereas the Europeans eat 130 kg, including cattle beef, pork, poultry and fish. Therefore, there is space for growth," he says.

"But the population will only eat more meat if there is an increase in income. While there is not an increase in buying power, the sector will not grow as desired."

Latin Union

The Sindirações and similar organizations in Mexico and Argentina are studying the creation of a Latin American association to defend the sector. In January, the three organizations should meet in Atlanta (USA) to discuss the matter.

The idea, according to Cutait, is to make this association a kind of spokesperson in negotiations with the Food and Agriculture Organization of the United Nations (FAO).

Also for 2007, the Sindirações is organizing the II Global Feed & Food, an event to take place in April, in São Paulo, the largest business center in Brazil.

The congress is organized in partnership with the FAO and the IFIF (International Feed Industry Federation). The theme of the event is sustainability, how to get ready to provide food for the whole of the population in a responsible manner, preserving the environment.

Anba – www.anba.com.br

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