March 4, 2009

The impact of bird flu and the economic slowdown may have reduced China's poultry numbers by about a third or more in the last month, executives in the poultry feed industry said on Tuesday (Mar 3).

Although China has not revealed any significant outbreaks of bird flu or the extent of its impact on the poultry industry, feed company executives said the sector has suffered a double blow from disease and a dip in demand that could keep stocks in short supply into the third quarter.

An executive from a leading feed and poultry producer said there are very few restocks after the Spring Festival and poultry stocks could have fallen by 30 to 40 percent compared to last year. Families traditionally feast over the Spring Festival and demand normally subsides after the holidays.

Consumption was also affected by weakening demand from migrant farmers, who used to be the major force in poultry consumption. Chinese officials have said 20 million migrant labourers were left unemployed after factories making export goods such as toys and textiles closed due to the global economic recession. This led to a sharp drop in poultry demand in factory canteens.

Migrant workers generate the majority of income for rural families.

Sun Zhiqiang, an official with China Feed Industry Association, said the consumption of meat and eggs has fallen as many migrant labourers are returning home. He added that many chicken slaughterhouses were closed, including half of those in the largest poultry producing province of Shandong, due to the outbreaks of bird flu.