Brazil stops BRF SA (ADR) (NYSE:BRFS) Poultry Exports to EU

0
7016

According to BRF SA (ADR) (NYSE:BRFS), Brazil’s agricultural ministry has temporarily suspended the production and certification of poultry exports from the BRF food processor having been hit by a food safety scandal. BRF said the ban only affected 10 out of 35 of its plants in Brazil.

BRF SA suspension

Through Luiz Rangel, the Brazil’s head of food safety, the ministry said that it anticipates to resolve the ban on poultry exports within a period of 30 days. The company is a target in an investigation having been accused of engaging in fraud to evade food safety checks. The agricultural ministry also stated that it scheduled a meeting to clarify and review the measures put in place.

After announcing the suspension for its export, BRF’s shares fell to their lowest since 2011. The company however managed to minimize much of the impacts that led to this loss and later stabilized to be only 1% less from its previous normal trade value. The head of food safety in Brazil, Luiz Rangel, said that they will negotiate with BRF in a slightly favorable environment after the suspension of the export certification. This however they believed would help maintain Brazil’s inspection services.

BRF suit

BRF’s woes began when one of the company shareholders sued BRF in the US allegedly for involvements in the food safety frauds. Some analysts feel the suspension is not desirable at the moment since the company still needs to reduce its debts and improve its margins. However, they still feel the suspension will affect less than 5% of the company’s sales volume.

ABPA in a statement said that, the Brazilian Chicken companies were able to export more than 5 million tonnes of meat to the European Union over the last ten years. BRF alone said that it shipped up to 278,000 tonnes of poultry and processed products to Europe.

The company however did not provide a breakdown for the shipments out of its plants in Brazil. However, the country being a long term partner to the European Union, it is expected that a solution shall be quickly found to enable the resumption of the exportations.

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.