September 15, 2003


Thailand 2004 Broiler Production Seen Up 5-6% Over 2003


Thailand's total broiler meat production in 2004 is forecast to grow by 5%-6% over the 2003 level, according to information from the U.S. Department of Agriculture.


Situation and Outlook


Total broiler meat production in 2004 is forecast to grow further by 5%-6% over the 2003 level, mainly because of an expansion in production capacities, from farming to processing, among existing integrated poultry producers. Due to price depression in early 2003, the Thai integrated poultry processors revitalized industry cooperation in controlling chick production again in 2003. With the support of the Department of Livestock Development, most of the integrated poultry producers agreed to cut down their weekly chick production by 20% during April until May 2003. However, the effect of this two-month chick production decline will likely be negated by growth in chick production in the balance of the year. Total broiler production through the year 2003 is estimated to increase further by 7% over 2002's level.


Broiler meat consumption is forecast to increase further by 10%-12% in 2004 based on the fact that there is still room to increase per capita chicken meat consumption, which has been as low as 11-12 kgs. In addition, broiler meat consumption will be driven by the steady growth in the Thai economy, the increased number of tourists in Thailand and increased popularity of chicken meat, the press release said. Although an outbreak of Severe Acute Respiratory Syndrome (SARS) disease in several Asian countries and Canada diminished the number of in-bound tourists in Thailand in the second quarter of 2003 (Mar- Jun), total broiler meat consumption in 2003 is estimated to increase by 10% over the year of 2002.


Total broiler meat exports are forecast to increase 6% in 2004 to 530,000 tons, of which about 370,000 tons would belong to uncooked products, with the balance going to further processed products.


Thai chicken meat exports in 2002 have been volatile, suffering plunging export prices in the first six months of 2003 then skyrocketing prices in the second quarter of the year (late June to currently). Export prices for uncooked boneless leg meat (BL) have increased rapidly from US$ 1,200- 1,300/ton for shipments delivered in the first quarter of 2003 to currently 2,500-2,600/ton for the last quarter delivery. Meanwhile, C&F prices for uncooked skinless boneless breast (SBB) shipped to the EU countries in the fourth quarter are currently US$ 2,100-2,200/ton, as compared to US$ 1,500- 1,600 shipped in the first quarter (Jan-May).


However, trade sources reported that Thai exports will be impacted for the rest of the year by two major developments: On one hand, Japan's decision to lift the ban on poultry meat from China, a major Thai competitor, may pose some threats to Thai exports.


On the other hand, the EU's response to the Thai request to lower the sampling of chicken meat imported from Thailand, from originally 100% to 10%, should benefit the Thai exports. All in all, total exports of chicken meat in 2003 should increase further to about 500,000 tons, compared to 464,243 tons in 2002. Of total exports, exports of both raw products and further processed products are likely to increase to 360,000 tons and 140,000 tons, respectively.