October 4, 2007

 

Strong demand to boost China's broiler production in 2008

 

 

China's broiler production in 2008 is expected to rise by 5 percent to 11.4 million tonnes, according to a USDA attache report posted Wednesday on the Foreign Agricultural Services Web site.

 

The increase would be partially driven by the pig diseases that have reduced the pig population over much of this year, which forced prices up and compelled consumers to substitute pork for other meats.

 

Sheep and goat meat is not preferred by the Chinese while beef production is much smaller than poultry production. Therefore, broiler meat will continue to be the main substitute for pork in 2008.

 

The development would also lead to an increase of poultry imports in 2008 that are forecast to increase by nine percent to 560,000 tonnes.

 

The US would continue to be the largest supplier to China, but US exports via Hong Kong transshipments face competition from Brazil and Argentina.

 

China's requirements for zero salmonella in shipments may also pose difficulties to US shipments.

 

Imports are expected to rise despite rising broiler production since these increases will likely be insufficient to make up for depressed pork production, the report said.

 

Meanwhile, China's 2008 broiler exports to increase by 10 percent to 390,000 tonnes.

 

The increase mainly comes from shipments to traditional export markets such as Japan, Hong Kong and South Korea that collectively account for more than 92 percent of China's exports.

 

Despite a shift towards poultry, pork will continue as the dominant meat in the Chinese diet. China's total poultry production only accounts for nearly 20 percent of China's total meat production while pork accounts for about 65 percent.

 

Demand for pork will likely remain strong because of its preferred taste and other reasons.

 

For example, many Chinese do not eat poultry breast meat because they believe it has "no taste." However, other chicken parts are set to do better as demand increases for popular broiler cut imports such as chicken paws, wings, wing tips, drum sticks and leg quarters.

 

Since broiler meat is the closest substitute for pork in China, production recovered quickly from a downturn in 2004 and 2005 caused by bird flu.

 

As China's tight pork market is expected to continue into 2008, broiler demand is expected to remain strong.

 

Feed use patterns also reflect this change as well.

 

During January-June 2007, China's broiler feed production increased by 22.4 percent to 14.8 million tonnes. For the longer term, poultry production will be influenced by corn prices and the competition from other industrial uses.

 

A final reason for growth in the Chinese broiler industry is an expectation that the EU may lift its ban on China's cooked poultry export.

 

These strong increases in poultry production should benefit US exports of breeding stock since China has to import almost all Western-bred stocks. The US is the largest supplier of poultry breeding stock.