Despite falling consumer demand, the shrinking of Chinese poultry production will drive imports to their highest level in over 20-years, US officials said.
But with bird flu keeping out supplies from Europe and the US, it will be South American exporters who benefit, particularly Brazil, according the US Department of Agriculture’s bureau in Beijing.
“As China’s domestic production struggles, China’s poultry imports will likely increase in 2017,” the bureau said.
The bureau sees broiler-meat imports at 600,000 tonnes, a level only seen once in back in 1996, and up 160,000 tonnes from 2016.
This would make China the world’s second-largest poultry importer, behind Mexico.
Bird flu slows imports of breeding stocks
The imports are being driven by slumping domestic production, which the bureau see at 11.0m tonnes, down 1.3m tonnes year on year.
This would be the lowest production since 2006.
The cause of low production comes thanks to the shortage of white-feathered breeding chickens for industrial poultry production.
Production of white-feather broilers, the world’s most popular commercial chicken type, requires the import of ‘grandparent stock’.
And with the EU and the US shut off due to bird flu concerns, commercial producers are struggling to source grandparent stock.
And the ability of less commercialized chicken producers to make up for the shortfall, with local yellow feather chicken suppliers cut off from the market due to other bird-flu related restrictions.
Brazil to see the benefit
Brazil will be the biggest winner from the increasing import demand.
“With the United States out of the market due to Chinese restrictions, Brazil has pecked its way to the top, accounting for over 85% of China’s broiler meat imports,” the bureau said.
“Brazil’s recent meteoric rise was possible as Brazil filled a vacuum created by bird flu-related bans in the United States and Europe.”
“With the United States and Europe essentially out of the poultry meat market, Chinese demand for South American poultry has Brazil, Argentina, and Chile, crying ‘winner-winner chicken dinner,” the bureau said.
Changing domestic market
Chinese chicken consumption is easing, down to 11.25m tonnes a year
This is the lowest consumption since 2006
The driving force behind this drop in consumption is not price-related, but rather due to changes in Chinese consumer preferences,” the bureau said, noted bird flu related concerns.
Crackdown on live chicken sales
“Because bird flu is most commonly transferred from poultry to humans in traditional wet markets selling live chickens, Chinese regulators have begun to close these wet market outlets, encouraging consumers to purchase fresh-slaughtered poultry at retail outlets,” the bureau said.
“As a result, while white bird production has been shrinking due to the lack of new breeding stock, which should normally encourage growth in yellow bird flocks, it appears that yellow bird flocks are not increasing to fill the market void because of these biosafety concerns at wet markets.”
The bureau also noted lower chicken consumption at factory canteens, thanks to outsourcing into lower cost markets.
And middle class consumers are increasingly favouring beef, mutton and seafood, as well as duck and goose, which are seen as healthier than chicken.
(Source – http://www.agrimoney.com/news/brazil-to-benefit-from-booming-chinese-chicken-imports–10441.html)