September 29, 2008

Poultry wholesale prices in Hong Kong is expected to surge 20 percent, as China reduced its daily chicken supply and a majority of retailers have left the business.

China has agreed to reduce the daily supply of live chickens to the SAR to 5,000, according to Secretary for Food and Health York Chow Yat-ngok. He expects daily total number of live chickens available in Hong Kong to drop to 10,000.

Chow said the government will proceed with a central slaughtering plant as soon as possible, but the scale will be smaller than earlier planned as only a small number of poultry operations will continue in live poultry businesses. He added that the government will soon decide the facility's scale and operation mode.

The battle against bird flu has seen about 72 percent of poultry stall owners handing over their trading licenses to the government in a bid to lower public exposure to live chickens.

Retailers at Kowloon City Market said they sold chickens at HKD 36-38 per catty. Cheung Sha Wan Wholesale Market sold a catty for HKD 22.9, up from an average of HKD 18. Chicken prices at a street market in Taipo reached HKD 40 per catty, up from HKD 35.

One-third of retailers who submitted buyout applications have also applied to sell frozen poultry, Chow said.

About 56 percent of live poultry farmers have surrendered their licenses to keep livestock, while 70 percent of wholesalers and 80 percent of transporters have applied to leave the live poultry trade. They would be compensated with HKD 660 million.

HKD 1 = US$0.1286 (September 29, 2008)