China Broiler Weekly: Low AA broiler prices stimulate buying, fuel price rally (week ended Mar 8, 2017)
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AA broiler surged as low prices enticed slaughterhouses to increase stockpiles while supplies of finishing broilers dropped considerably. Rebounding strongly from historic lows, AA broilers catapulted by a whopping 36% over the week.
In view of supply shortages due to high mortality rates, AA broiler farmers expanded inventories while chick prices were low. This pushed prices up by RMB0.80-1.20/chick to RMB1.35-1.80/chick as supplies were inadequate to meet the abrupt jump in demand.
Prices of fast-growth native broilers continued to fall 9% in Guangdong, where the bird flu outbreak remained severe. However, in other regions of China, demand recovered lifting prices steadily. Overall, prices of China breed broiler increased 2%.
Nonetheless, prices of day-old chicks stayed weak as farmers were cautious in expanding stocks.
AA broiler market is likely to see a downward correction in prices, as slaughterhouses turn cautious after the recent rally. However, at less than RMB6/kg, current prices are still way below past years' average of RMB9.38/kg. Unless, the bird flu epidemic worsen in the coming period, AA broiler prices are unlikely to break the new low record set a couple of weeks ago.
For China broiler, prices are expected to consolidate higher as supplies are limited.
RMB=US$0.1447 (Mar 10)
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