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December 14, 2011

Thai Broiler Weekly: Chicken prices slide, sparking slump fears in the offing (week ended Dec 9)

An eFeedLink Exclusive
 

Price summary

The farm-gate price of live birds softened slightly this week, falling by THB1-2/kg in Bangkok and nearby provinces as production continues to pick up.

There has been no noticeable change in retail prices across the country so far. They are not expected to go down so low, if at all -- at least until the end of the year -- because of the coming New Year holidays when demand is traditionally strong.
 

Market analysis

However, the softening in the birds' farm price appears to belie analysts' expectation that a price surge would follow once the country's months-old flooding was over - as it did after the heavy flooding in southern and northern Thailand early this year.

In fact, in a recent analysis sent to investors, GFPT projected live broiler prices to be within the THB45-48/kg range till the end of the year.

The fear among industry insiders is that this could be the beginning of a price slump, which they expect to happen due to oversupply.

Dr. Chaisaks Boonprasopthanachote, chief executive officer of the Thai Food Group, one of the country's leading livestock integrators, said the current rash of expansions among poultry producers following a year of high prices and profitability could lead to oversupply and price slump.

Big broiler producers, including Saha Farm, Cargill and GFPT, have on-going expansion programmes that would increase their respective production capacities by tens of thousands of tonnes.

With such expansions, Dr. Chaisaks says, Thailand's weekly broiler output could swell to 28 million a week from 22-24 million tonnes at the moment.

Despite wreaking havoc across 30 provinces, the recent flooding caused damaged to only 1% of Thai broiler farms, according to the Department of Livestock Development.

About 80% of the kingdom's chicken farms, it added, are located on higher grounds and were not affected by the country's worst flooding in 60 years.

The department, which has reported that most of the flood-hit broiler farms have since resumed operation, expects Thailand's 2011 chicken export goals to remain on track. 

Thailand hopes to export 460,000 tonnes of cooked and uncooked chicken this year, 7% more than it did last year.
 

Markets

Prices for whole dressed chicken
as of  Dec 2(in Thai baht/kg)

Prices for whole dressed chicken
as of  Dec 9(in Thai baht/kg)

Changes
(in Thai baht/kg)

Supermarkets (Bangkok)

135-145

135-145

--

Public markets (Bangkok)

75-85

75-85

--

Public markets (Suburbs)

70-80

70-80

--

Farm gate 

37-42

37-40

-2.00

US$1=THB 31.25 (Dec 14, 2011)

 

 

 

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