UPDATE 1-Brasil Foods profit down 60 pct on feed costs

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* Weak prices in Japan, Middle East lead to flat exports

* CFO sees pricing rebound as inventories come down

SAO PAULO, April 27 (Reuters) - Brasil Foods, the world's largest poultry exporter, posted a 60 percent drop in first-quarter net income from a year earlier as feed costs rose and export revenue stagnated on Middle East unrest and high inventories in Japan.

Chief Financial Officer Leopoldo Saboya said prices in those markets bottomed out in January and February and appeared to be recovering, helped by the reopening of markets in Iraq and Iran.

"We see the oversupply falling and prices are beginning to react," Saboya told journalists at an earnings press conference.

The company said in a Friday securities filing that first-quarter net income fell to 153 million reais ($81 million) from 383 million reais a year earlier.

Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, also fell, by 35 percent to 532 million reais, as the cost of raw materials such as corn and milk rose and revenue growth slowed.

Net operating revenue grew 5 percent from the first quarter of 2011, less than the 13 percent year-on-year increase in the fourth quarter, due to flat export revenues and disappointing growth in Brazil's domestic market, Saboya said.

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