Brazil's Santa Catarina state said it has ruled out an outbreak of bird flu in a commercial chicken farm while the federal government was keeping it on a list of suspected cases pending further tests.

Brazil, one of the world’s largest producers and exporters of poultry, has confirmed the country’s first bird flu outbreak on a commercial farm.

Brazil began a 28-day bird flu observation period on Thursday which it hopes will show the country's chicken farms are free of the disease after local authorities said a farm where its first outbreak was detected had been fully disinfected.