November 1, 2007

China's poultry demand to triple in 3-5 years 

China's per capita poultry consumption is likely to treble in the next 5 years, as higher pork prices force more Chinese consumers to turn to chicken, according to the president of Qingdao Chia Tai Co.

Poultry producers have had to cut exports of poultry this year to cater to rising demand at home, Yu Jianping the president of Qingdao Chia Tai Co. Ltd told Reuters.

Chia Tai, a subsidiary of Thai food conglomerate Charoen Phokphand Foods, accounts for one-fifth of China's chicken exports, mainly to Japan.

It currently runs five plants in northern China, with the Qingdao plant slaughering about 40 million chickens a year.

High pork prices have led to more consumption of poultry, which will grow at least 20 percent this year, Yu said.

However, for poultry to displace pork significantly would take 3 to 5 years, during which poultry demand would grow strongly in China.

Pig diseases which killed off a large number of pigs in the earlier part of the year caused pork prices to soar this summer. Slim margins had also discouraged pig farmers from carrying on the activity. High pork prices would take at least until the middle of next year to recover, according to  official estimates, fuelling speculation the Chinese palate may shift towards chicken, the cheaper alternative.

With food safety being emphasized more often now than ever before, big companies with strict safety standards like Chia Tai is given the impetus to expand, he said. The fact that the company would be the supplier for chicken for the 2008 Beijing Olympic Games is testament to their strict safety record.

Meanwhile, food producers in the northern province of Shandong, China's top food exporting province, have been forced to meet higher safety standards to export to their largest market, Japan, which imposed tougher safety regulations last year.