February 1, 2006

Thai poultry industry should grow despite export restrictions
 

Thailand's broiler industry should grow in 2006 as producers continue to shift towards cooked products to meet higher export demand, according to a US Department of Agriculture report posted Monday.

Broiler meat production is estimated to grow 18 percent in 2006 due to better production and management. The increase is in line with projected increases in domestic consumption due to renewed confidence in the safety of chickens among consumers. The cheaper price of chicken over other meats is also expected to boost demand.

There is 30 percent excess capacity among integrated broiler producers due to the impact of bird flu in 2004. Thus, there is capacity to increase poultry output rapidly to meet recoveries in domestic and overseas demand. In addition, problems such as limited breeding poultry supplies and stringent import controls by the Thai Department of Livestock Development have been resolved. As a result, imports of grandparent-stock and parent-stock are recovering, resulting in increased chick production.

Easy access to financing for most poultry processors have enabled investments in production lines, while improved disease surveillance and stringent measures among integrated producers should bring down bird flu incidents in the next few years.

Broiler meat consumption in 2005 recovered from a sharp drop in consumption levels during 2004, but there is still a long way to go before reaching record consumption levels in 2003.

Exports in 2006 are estimated to grow by 30 percent over 2005, mainly because Thai cooked products beat other competitors such as China and Brazil in terms of quality and prices. However, this export level (350,000 tonnes) still pales in comparison to record exports of 2003 (545,000 tonnes). Experts predict that exports will likely be in the form of cooked products as bans on uncooked chicken continue. The EU, Japan, South Korea, Singapore, and Hong Kong will remain major markets for Thai cooked chicken products.

Thailand exported 265,450 tonnes of cooked meat in 2005, with Japan being the largest importer, accounting for 54 percent of total exports followed by the EU (41 percent), according to the Thai Broiler Processing Exporters Association.

Cooked chicken products are normally made-to-order meat products that are  prepared by steaming or boiling. Some of these cooked meat products are puffed or seasoned.

The report added that Thailand is a potential market for US chicken parts (especially leg-quarters), mechanically deboned meat (MDM), and value-added chicken meat.  Potential buyers would be food processors (sausage processors in the case of MDM) and supermarkets. However, the report added that US export opportunities of these chicken parts would be hindered by Thailand's non-transparent controls on issuing import permits.