July 21, 2008

 

Taiwan's poultry processors may merge on bad market conditions
  
  

Stagnant poultry prices in the retail market, rising operating costs and excess supply may lead to the consolidation of Taiwanese poultry processors, according to Taiwan Poultry Processing Association (TPPA) chairman Chen Duen-fang.

 

Stagnant poultry prices in the retail market have seriously impacted the poultry processing industry, Chen said, pointing out that the prices have been rising without equivalent gains made at retail locations.

 

"Currently, there is a loss of NT$2.5 to NT$3 on each electrically slaughtered chicken," Chen said, adding that mergers among poultry processors can be expected as early as year-end if conditions remain as it is.

 

Local processors slaughter about 400,000-500,000 broilers per week but most processors using electric-slaughter have been losing money in the first half of the year except during the Chinese New Year in February, Chen said.

 

Production costs have reached record highs, with 600-gramme broiler costing NT$27.8 while native chicken meat costing NT$49. The processors may also be further affected due to rising energy costs and excess in supply, Chen said.

 

Chicken farming volume per week has increased to about 4 million, up from 3.3-3.6 million in the past few years, amid a weakening domestic economy that has reduced the consumers' spending power.

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