November 15, 2019

 

China lifts ban on US poultry imports after nearly five years

 

The ban lift on US poultry meat and eggs, which was implemented from January 2015 after an avian influenza outbreak, could lead to more than US$1 billion in annual shipments to China, reported Reuters.

 

Robert Lighthizer, US Trade Representative said China is an important export market for US poultry farmers, and projects exports to China to hit more than US$1 billion every year for poultry and poultry products.

 

The announcement comes during recent trade negotiations between the US and China, as a limited trade deal is being finalised.

 

The ban lift also comes at a time when China is trying to supplement its meat supply shortfall because of the African swine fever spread in the country, which has wiped out millions of swine.

 

Before the ban, the US Department of Agriculture (USDA) reported US poultry products to China were worth US$500 million in 2013.

 

Jim Sumner, president of industry group USA Poultry & Egg Export Council said China will purchase a variety of US poultry, not just chicken but also turkey and duck to mitigate dwindling swine supply.

 

US poultry producers' shares increased after the announcement - Sanderson Farms rose 4.1%, Tyson Foods went up 2.1% and Pilgrim's Pride Corp increased 1%.

 

Sumner said before the ban, China placed a 25% tariff on US poultry products, in line with duties in place for other countries.

 

China was the leading importer of chicken feet and wing tips, poultry products that the US doesn't consume.

 

After the US poultry ban was implemented, Sanderson Farms converted chicken feet and wing tips into pet food and fertiliser. The ban put an end to US$62 million in total sales for the third largest US poultry producer in fiscal 2014.

 

Tyson Foods said the company is looking forward to new export opportunities now that the US poultry ban has been lifted, noting that China was a major poultry market before the ban.

 

Pilgrim's Pride, largely owned by world's biggest meatpacker JBS SA said the renewed market access to China will lead to boosted growth opportunities and value creation for the company, its growers and its business.

 

The US poultry ban was lifted by China after the USDA amended the Federal Register to approve imports of China poultry products.

Poultry imports to China went up 48% to 9.2 billion RMB (~US$1.3 billion; 1 RMB = US$0.14) between January to September 2019 this year. This included breast meat, a poultry product considered surplus to China.

 

Arlan Suderman, INTL FCStone chief commodities economist said the rise in US exports of poultry products to China will eventually lead to increased prices for local US consumers too.

 

-      Reuters