February 12, 2004
Bird Flu Outbreak Could Redefine China's Frozen Chicken Exports
An eFeedLink Special Report
Below is an abstract of the report: Bird Flu Outbreak Could Redefine China's Frozen Chicken Exports
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Since January 27 when the bird flu outbreak was reported in China's Guangxi, Hubei and Hunan provinces, countries such as Japan, South Korea, Singapore, Romania, Switzerland, etc. have taken measures to either restrict or ban the import of poultry products from China.
The prohibition on China's poultry exports triggered by the bird flu outbreak is likely to inflict unprecedented financial losses on China's poultry industry, with frozen chicken products expected to be the hardest hit.
According to China's Customs authorities, China's 2003 export earnings from its three main poultry products, namely, live poultry, frozen chicken and fresh eggs, totaled US$377 million, of which frozen chicken exports accounted for US$279 million.
More contents in this 3-page report include:
Japan's Poultry Supply Seen Affected by Its Ban of Imports from China & Thailand
Currently, China and Thailand are the primary suppliers of poultry and its products to Japan, which imports 500,000 tons of chicken meat annually. Of this, 240,000 tons are from Thailand and 122,000 tons from China, comprising 46% and 24% of Japan's overall chicken meat imports respectively. Of Japan's imports of 220,000 tons of poultry products, 146,000 tons are from China and 73,000 tons from Thailand, making up 65% and 33% of its overall poultry product imports respectively.
China's Customs authorities estimated that Japan accounted for most of China's 227,000 tons of frozen chickens exports in 2003. Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) figures showed that China supplies 122,000 tons of chicken meat to Japan annually, accounting for 7% of Japan's domestic supply and 24% of Japan's chicken meat imports. By prohibiting the import of poultry products from China, Japan has dealt a blow to China's frozen chicken exports.
The MAFF revealed that, as at end November 2003, Japan's chicken meat inventory stood at a mere 110,000 tons, which accounts for only 6% of the annual supply for the Japanese domestic market.
As China and Thailand are currently both affected by the bird flu outbreak, the Japanese government has already discontinued the import of all poultry products from these two countries, resulting in the impending shortage of poultry products in the Japanese market.
Great Opportunity for China to Restructure Its Frozen Chicken Exports After Bird-Flu Outbreak is Contained
The Chinese government has already put in place strong measures to contain the current bird flu outbreak. If it can be effectively contained in the short run, the negative impact on poultry exports can be limited up to a maximum period of only 6 months. A quick recovery for China's poultry exports is possible.
The poultry-importing countries, before lifting their ban against China's exports, would have had their poultry inventories drastically cut back for a prolonged period. The build-up demand by the time the ban is lifted will drive a remarkable growth in poultry imports by these countries, which will partly make up for China's losses incurred during the bird flu outbreak.
China is not the only country affected by the bird flu crisis. By capitalizing on the opportunity to restructure its poultry export systems, China may reorganize its entire poultry export patterns, becoming the first to seize hold of poultry market opportunities globally.
