September 5, 2006

 

EU broiler production falls as imports make their way in
 

 

EU broiler production in 2006 is forecast to be four per cent lower than last year due to bird flu but would rebound in 2007, according to a new USDA report.

 

Even though production is down from record levels last year, reduced demand is also affecting the industry. So far, commercial stocks have accumulated to some 300,000 tonnes as of April 2006.

 

EU consumption levels are expected to fall by 1.3 percent overall in 2006, according to a report by the US Department of Agriculture's GAIN analysis unit.

 

Chicken consumption in countries with occurrences of bird flu fell sharply while consumption levels in other relatively unaffected EU states such as the UK increased as poultry prices fell, the report said.

 

EU broiler production in 2006 is expected to fall four percent from 2005, due to difficult market conditions, especially in countries hit by bird flu such as Greece and Italy. 

 

Bird flu also forced EU countries to cut chicken production, especially in countries which are major poultry exporters such as the Netherlands, Germany and Denmark, the report said.

 

The report's analysts expect EU chicken exports to decrease significantly during 2006, as decreased demand in world markets and a glut of cheap poultry from Brazil and the US inundated the markets.

 

EU exports over the first four months of 2006 were down 22 percent, mainly as a result of the bans on chicken from France.

 

The end of the ban on French poultry exports, and the gradual return to regular consumption internationally, are expected to allow EU chicken exports to recover over the rest of 2006.

 

Meanwhile, chicken imports into the EU are expected to increase in 2006 by 15 percent as imports at reduced tariff are allowed in again from Brazil and Thailand due to the WTO ruling that EU's tariffs and quotas on these items were illegal.  Cooked poultry imports from Thailand had been increasing as the country sought ways to work around the ban on its fresh poultry.

 

However, the EU has recently proposed quotas to control the increase in exports from both countries.

 

The EU's top poultry producers are the UK, the Benelux countries, Spain, France, and Italy while its top consumers are the UK, Spain, Germany, France and Italy.