August 29, 2008

China gains entry to EU's processed chicken market

China's cooked chicken exports are finally making their way to the EU after being banned from the market for six years.

However, currently, only Shandong-based enterprises are certified to export to the region.

Industry insiders estimated that the EU market could bring about US$300 million export revenue to the province.

In 2002, the EU banned all Chinese poultry products due to chemical residues and bird flu.

The Chinese government has expended much effort to regain the EU market.

In approving Chinese exports, the EU directives stated that China-based EU agencies have conducted numerous inspections and have concluded that the relevant departments in China, particularly those in Shandong, have build up effective food safety monitoring systems that were compliant with EU standards, ensuring the safety of poultry meat products.   
　

China's entry into the World Animal Health Organisation and company co-operation with EU agencies has also led to the lifting of the EU ban on Chinese poultry products.

Besides joining the organisation, China's government has also agreed to report outbreaks of bird flu or Newcastle disease within 24 hours. 

　　
These are the primary reasons the EU has agreed to Chinese poultry products that were processed at above 70 deg C. However, this is currently limited to Shandong province. Nine companies in the province may be allowed to export, although they have not yet been named. 

EU authorities have conducted four tests on chemical residues, poultry breeding cycles, bird flu measures and food processing methods in Shandong's poultry products since 2004.

The relevant departments have been collecting information on EU standards aggressively and abided strictly by them. The relevant exporting companies have also invested huge sums of money building control systems which strengthened their bird flu defences and food safety.

Shandong could expect to eventually export a total of 100,000 tonnes of poultry a year, with revenue of up to US$1 billion and profit margins of 40 percent. Some experts have called the figure a tad too optimistic.

In 2007, the province exported US$430 million worth of poultry products to Japan and other countries, with cooked products accounting for US$330 million.

For the first seven months of this year, even though frozen exports grew 37 percent, processed frozen product exports fell 31.5 percent. Total export revenue was just at US$130 million.  　　

Currently, 96 percent of Shandong's processed products are headed to Japan. Products were mainly chicken drumsticks. However, the EU market requires mainly chicken breast. This meant the two markets would be complementary, which is why authorities believe the opening of the EU market would bring about further value addition to the province's poultry processing industry.