A truck loaded with chickens passes in front of a unit of BRF S.A., a food producing industry, in the city of Lajeado, Rio Grande do Sul, Brazil, March 27, 2025. REUTERS/Diego Vara/File Photo

By Ana Mano

SAO PAULO (Reuters) -China and Europe will resume buying chicken products from Brazil "in a matter of days or weeks" as local authorities controlled a bird flu outbreak that triggered trade bans in the second quarter, Brazilian food processor BRF SA said on Friday.

Brazil's first bird flu case at a chicken breeder farm last May sparked a number of trade restrictions that were gradually lifted by importers as the world's largest poultry exporter controlled the outbreak.

The government declared Brazil free of the highly contagious disease in June.

In a conference call on BRF's quarterly results, management said food inventories had risen above desirable levels due to the export restrictions, a situation BRF aims to resolve in the short term.

"As those two markets reopen we will return to inventory levels more closer to zero," CEO Miguel Gularte told an analyst on the call. "It is our philosophy not to keep inventories without sales."

BRF described China and Europe as "extremely important" markets. On Thursday, management had welcomed a decision by Saudi Arabia and Chile to resume purchases, citing official government disclosures.

BRF said it redirected some chicken cuts usually sold to China to other markets. The company's poultry exports fell by 5% last quarter, compared with an overall drop of 15% for Brazilian exports.

Goldman Sachs said BRF's results were surprisingly positive given the challenging scenario.

The company's shares rose almost 4% in late morning trade in Sao Paulo.

Genial Investimentos wrote that despite the avian flu effects, BRF's margins and earnings before interest, taxes, depreciation and amortization, a measure of operating income known as EBITDA, "exceeded expectations."

Going forward, lower grain prices, corn in particular, will reduce production costs and widen margins during the third and fourth quarters, managers on the call said.

(Reporting by Ana Mano; Editing by Chizu Nomiyama and Elaine Hardcastle)