Saudi Arabia halts some Brazil poultry including JBS plants

Saudi Arabia suspended poultry imports from 11 processing plants in Brazil, including seven owned by meat giant JBS SA, according to a list published on the kingdom’s food authority website.

The Saudi Food and Drug Authority said imports from the plants will be suspended from May 23. The measure was taken without explanation or prior notice, according to a statement from Brazil, the world’s largest poultry exporter. The South American country’s government is in contact with Saudi officials and seeking clarification.

The suspension comes at a delicate time for the chicken industry in Brazil, which faces surging costs from rising corn prices and weakening domestic demand as Covid-19 saps purchasing power and boosts unemployment. Saudi Arabia accounted for about 11% of Brazil’s poultry exports last year, according to industry group Brazilian Association of Animal Protein.

Brazil may take the case to the World Trade Organization if an undue trade barrier is proven, according to the joint statement from the country’s foreign affairs and agriculture ministries on Thursday. Saudi Arabia’s embassy in Brazil didn’t immediately respond to an email sent outside normal business hours seeking comment.

Brazil officials said the 11 Brazil plants were previously approved for shipments. The seven JBS facilities listed by Saudi Arabia include plants in Passo Fundo and Caxias do Sul, in Rio Grande do Sul, and Campo Mourao, in Parana state.

Brazil’s JBS said it had already diverted poultry to other markets and that it had contacted the health authority of Saudi Arabia to “discuss and understand” the suspension.

JBS shares fell 0.9% at 10:48 a.m. in Sao Paulo.