July 26, 2013

 

 

Beijing is expected to delay further the financial recovery of poultry-related companies following the confirmation of the latest case of H7N9 on July 20.

 

In April, the government closed many markets in some areas, including Zhejiang and Jiangsu provinces, to prevent the spread of the disease. They began to reopen from the end of June.

 

The total losses of poultry-related companies all over the country up until the end of June exceeded RMB600 billion (US$92.2 billion) since the first case of H7N9 virus was discovered by the authorities at the end of March, according to the latest statistics from the National Poultry Industry Association.

 

"The monitoring system of updated figures on losses was shut down and poultry markets gradually started to reopen at the end of June because there were no more new cases discovered until July 20," said Liang Zhong, an officer in charge of the pigeon industry at the National Poultry Industry Association.

 

Zhong added the association would wait for responses from businesses on the further effects of this latest case to decide whether the monitoring system would restart.

 

The previous outbreak brought the industry to a standstill because fewer people were willing to buy poultry related products. It led to a sharp fall in the prices of chickens, pigeons, ducks and even eggs. The average selling price of a pigeon dropped from RMB11.5 (US$1.87) in March to its current RMB6.5 (US$1.06) while the price of chicken dropped from RMB12 (US$1.96) a kilogramme to RMB4 (US$0.65).

 

"There was a slight recovery in prices from the end of June when the poultry markets were gradually reopened in Zhejiang and Jiangsu provinces but the newly found case would probably bring about another slowdown in the industry," said Zhong.

 

Because all poultry stands were shut down between April and June in the regions where people were found to be carrying the H7N9 virus, the breeders, suppliers and sellers of poultry are keen to make up the huge losses as soon as possible. Although poultry markets - but not those where birds were slaughtered upon request - were reopened, poultry breeders are still suffering hard times with very few people willing to buy chickens from them.

 

"Because live poultry-slaughter stands in the city are still temporarily shut down we haven't seen any growth in the sales of chickens to make up for our huge losses yet," said Ye Enlin, managing director of the Wenzhou Minxin Poultry Cooperative in Tengqiao village, Wenzhou, Zhejiang province, an area well-known for smoked chicken products.

 

Enlin added that he might shut down the cooperative if the situation in the live poultry industry doesn't recover rapidly by the end of the year because he won't have enough money to survive.

 

Sales of chicken dishes in restaurants also dropped rapidly between April and June because of fears about the virus. Xiao Nan Guo Restaurant Holdings Ltd suffered an 80% decrease in the sales of chicken dishes between April and June. They have slowly recovered to between 50% to 60% of pre-virus figures.

 

"The newly found case of the H7N9 virus should be a one-off because the current hot weather is not the peak season for the spreading of viruses," said Huang Wei, media manager for Xiao Nan Guo.

 

Listed companies related to the live poultry industry faced huge losses, as expected.