February 23, 2017
China Broiler Monthly Review: Bird flu panic causes panic selling in January, hammers China broiler prices
An eFeedLink Exclusive
January broiler numbers plunged 4.38%. Broiler inventories have fallen approximately 9% since peaking in July 2016. The decline was initially caused by falling returns. Numbers fell steeply during December and January, when human bird flu deaths coincided with the approaching Lunar New Year. This induced the panic selling of many immature birds, greatly accelerating this ongoing inventory downturn.
Broiler releases surged 14.75% amid panic selling.To mitigate losses from a worsening January bird flu outbreak that killed 79 people and infected 192, broiler farms hurriedly released broilers en masse, including many smaller, immature birds. Hence, even as broiler inventories shrank over the past half a year, broiler release volumes surged in last month's run up to Chinese New Year.
Although replenishment volumes increased2.20% during January, it was but a fraction of the expansion in broiler releases.Broiler farmers were in fact downsizing their chicken stocks, often in a near panic over possible losses due to bird flu.
The outbreak of H7N9 bird flu aggravated rapidly during January, with 192 people infected and 79 dead from the disease, jumping 80% and 300% compared with December. Jiangsu was the worst hit province with 49 inflictions and 21 death cases, followed by Zhejiang and Anhui, both recording 11 human deaths due to the disease.
Other illnesses that were more prevalent wererespiratory illnesses, E. coli, infectious bronchitis, coccidiosis, and Newcastle disease. Even so, all these other outbreaks had a far smaller collective market impact than bird flu, which spread into the human population, causing nearly 100 deaths.
AA broiler prices tumbled RMB0.92/kg or 12.78% while those of China breed broiler prices decreased 10.20%.
A deluge of broiler panic selling hammered prices in the first half of January, when human bird flu deaths took off. Farmers were not only worried that H7N9 would result in overbearing losses; they were also concerned about the traditionally depressed two months following Chinese New Year.
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