Poultry and Products Annual - 2011

Poultry and Products Annual - 2011

Executive Summary

FAS Beijing (Post) forecasts China’s broiler meat production will continue higher, rising nearly five per cent to 13.8 million metric tons (MMT) from an estimated 13.2 MMT in the previous year. Rising broiler meat prices are more than offsetting still high feed costs.

Total poultry production in 2012, including goose and duck production, is forecast to account for 23 per cent of Chinese total meat production.

Broiler meat imports in 2012 (not including chicken claws) are forecast to fall 13 per cent to 200,000 metric tons (MT) following an estimated 20 per cent decline in 2011 due primarily to sharply lower imports from the United States resulted from China’s measures of anti-dumping duties (AD) beginning February 2010 and countervailing duties (CVD) in August 2010 on US broiler product exports to China. These measures are expected to continue into 2012. Chicken claws will continue to dominate overall broiler meat imports with chicken wings accounting for most of the remainder. So far, higher shipments from South America have not completely offset reduced US shipments to China.

China’s broiler meat exports in 2012 are forecast to increase over nine per cent to 445,000 MT, following an eight per cent increase in the previous year. Consumer demand in Japan and Hong Kong has been particularly brisk in 2011, and industry contacts are expecting continued higher sales in 2012.
Broiler Meat

Broiler Production in 2012 will continue higher

Broiler meat output is expected to jump nearly five per cent in 2012 to 13.8 MMT, following another five per cent increase in 2011. Including duck and goose, total Chinese poultry meat production will also rise five per cent to 18.7 MMT. Fueled by strong demand, Chinese broiler meat output growth is outpacing all other meats in 2011. Considerably higher pork prices in 2011, combined with expected lower broiler meat imports in 2012, are helping to fuel rising broiler meat production. High prices for pork are expected to continue into 2012.

In July 2011, the price of broiler meat on average was $2,737 (RMB17,490) per MT, up 24 per cent from the same month a year ago. Strong pricing and demand for local chicken is offsetting continued high feed prices and encouraging producers to expand placements. Compared to red meat and feed ratios (8:1 for beef and 3:1 for pork), broiler meat is the most efficient at just over 2.5:1, thus keeping broiler producer feed costs relatively low. Pork prices are a major driver in the domestic meat market as pork accounts for most Chinese meat consumption. Record high pork prices this year have helped push broiler meat price to its highest level in the last four years. Reduced imports from the United States following China’s implementation of AD and CV duties in 2010 are also helping to boost local prices.

Both total and per capita broiler consumptions are on the rise

China’s total broiler meat consumption in 2012 is forecast to rise four per cent to 14 MMT (not including chicken claws), following a five per cent increase in the previous year. This will maintain Chinese per capita broiler consumption at 10 kilograms as in the previous year, which is one kilogram higher than 2010.

Continued demand gains are bolstered by the lower cost of broiler meat compared to Chinese red meats (please see chart 5). Broiler meat has played an important role substituting red meats when prices are high due to short supplies. The efficient feedgrain ratio for broilers reduces production costs and helps keep broiler meat prices competitive.

Broiler meat imports are expected to fall 13 per cent

Post forecasts China’s broiler meat imports in 2012 will decline 13 per cent to 200,000 MT (not including chicken claws), following an estimated 20 per cent decline in the previous year, mainly attributed to the previously mentioned AD and CVD measures on US broiler product exports to China.

Chicken claw imports will continue to dominate China’s total broiler product imports in both 2011 and 2012 accounting for over two-third of China’s total broiler product imports because of strong domestic demand. Claw imports in 2011 are forecast at nearly 300,000 MT, a 42 per cent decline from 2010 due to the AD and CVD measures against the US exports to China.

Chinese broiler meat imports (not including chicken claws) in 2012 from the United States are forecast to drop 20 per cent to estimated 24,000 MT, following a 51 per per cent decline in the previous year, while chicken claw imports from the United States are forecast to decline 15 per cent to 21,500 MT following a 75 per cent decline from the previous year. Before China’s implementation of the AD and CVD duties, the United States was China’s largest broiler product supplier. Overall, US product (including broiler meat and chicken paws) in 2009 accounted for 85 per cent of China’s total broiler product imports. At the moment, US share is only 10 per cent. Limited volumes of US claw shipments will continue despite the AD and CVD duties due to strong market prices in China.

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