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Brazil aims to double US tilapia exports on back of Trump tariffs

Rare combination of tariffs on Chinese tilapia and favorable exchange rates boost prospects.

Brazilian tilapia exports to the US could double over the next 12 months helped by the Trump administration's imposition of tariffs on Chinese products, according to aquaculture trade body Peixe BR.

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Fresh tilapia is flown from Brazil to the US in fresh fillet form, making it a niche market for Brazilian producers and processors, but Trump's move may provide a wider opening.

Under the latest move in the US's escalating trade war with China, the Trump administration last week imposed an additional 10 percent on Chinese seafood products including tilapia.

"If the same tariff rate is maintained, I think we could double exports in the next year," Peixe BR CEO Francisco Medeiros told IntraFish. "Buyers are already starting to get in contact."

Weakness of the Brazilian currency against the US dollar is making the situation more attractive for exporters.

"If the dollar stays in this band of BRL 3.70 to BRL 3.90 including forecasts of nearly BRL 4 to the dollar before the end of year, there is a good opportunity for the Brazilian industry," Medeiros added.

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Leading exporter GeneSeas, the Sao-Paulo based tilapia producer and processor, annually flies around 900 metric tons of fresh tilapia fillet and 200 metric tons of whole fish to the US.

GeneSeas CEO Breno Davis sees that figure doubling in the next two years and rising even further if the Trump administration tariffs on Chinese tilapia are maintained and exchange rates remain favorable.

"These two events happening at the same time means we have to look at the American market as a priority for distribution," Davis said.

At the same time, GeneSeas is keeping its focus on the fast growing Brazilian market as it pulls forward plans to increase tilapia production to 25,000 metric tons a year in 2019.

Brazilian tilapia production is forecast to see double-digit growth again in 2018, helped by consumer demand and industry investments.

Production rose more than 13 percent in 2017 to 357,639 metric tons, accounting for more than half of Brazil's 697,000 metric tons of farmed fish output.

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In Davis's view, tariffs on Chinese seafood could provide producers and processors across Latin America increased business opportunities in the US as buyers there seek alternatives for fresh and frozen products that don't contain weight increasing chemical additives.

For some producers, business is expected to grow in the US regardless of the shifting political winds.

Sao Paulo state-based red tilapia producer Royal Fish currently flies 2,500 kilograms a week of fresh whole red tilapia to New York and Miami.

By October, Royal Fish expects to be awarded certification for the Best Aquaculture Practices (BAP) program as frequently demanded by US buyers of fish in fillet form, a market the company covets.

"We expect to be able to export [fillets] regardless of tariffs on Chinese products," Royal Fish General Manager Juliano Kubitza told IntraFish. "My customers tell me that if we had BAP certification we would probably sell more."

Kubitza doubts whether frozen tilapia from Brazil can compete with Chinese imports despite the 10 percent tariff announcement.

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