Chicken market report
Thailand
In a bid to promote Thai food industry as world
kitchen, the Board of Investment (BoI) has launched
the strategy to push amount of Thai food exported to
world markets. Sompong Wanapha, a secretary general
of BoI revealed that BoI would invite major food producers
to brainstorm for improving the supply chain and logistics
systems in food production line, which will promote
Thai foods through Thai restaurants around the world.
The major producers consist of Chareon Phohpand Group
(CP), Thai Union Frozen Products (TUF), Betagro Group,
Laemthong Group, Saha Farms Group, and Saha Group. It
is expected that the producers will take a benefit to
lift up a quantity of export due to the products will
be same standard.
According to the Thai Chamber of Commerce has recently
signed a business cooperation contract with the Moscow
Chamber of Commerce and Industry and the St Petersburg
Chamber of Commerce and Industry. Charoen Pokphand (CP)
Group is looking at the possibility of exporting frozen
chickens and other processed foods to Russia. The group
is interested in exporting frozen chickens to Russia
for past five years. After this contract, it seems to
the group has a chance to export chickens to Russia
more than previously.
Trading was steady. Local demand remains increased
as a result of the increase of consumer confidence in
chicken consumption. While live supplies tend to increase
in some area on the grounds that the cold climate has
benefited poultry growth. Couple with the current live
bird induced to producers has decided to increase production.
As for chicken exported sector, the major producers
have kept the beforehand orders through the end of this
year from foreign importers. The export sector will
be bright for Thai exporters this year.
Domestic live chicken prices mostly have significant
decrease compared to the previous week due to the throughput
has continued to increase in many areas. Farm gate prices
last week have sharply decreased from 31-33 baht to
28-30 baht per kilogram as result of the increase of
live supply. Couple with the cold climate has benefited
poultry growth, which would help reduce the raising
period and entering fast to the market. The price trend
was weak to steady.
The wholesale price of live birds in Nakhon Pathom
has slightly decreased to 30 baht per kilogram from
31 baht last week. While Chacheongsao live bird's price
has significantly decreased to 28 baht per kilogram
from 32 baht per kilogram last week. Chonburi live bird's
price also sharply decreased to 29 baht per kilogram
from 31 baht per kilogram last week. However current
prices in three major provinces were higher than 18-19
baht per kilogram in the same period last year.
The wholesale price of live birds in Bangkok has significantly
decreased to 31.00 baht per kilogram from 33.00 baht
last week, but higher than 20.00 baht in the same period
last year. The retail price of fresh (not cut in pieces)
chicken has sharply decreased to 45-48 baht per kilogram
from 48-50 baht last week. The wholesale price of fresh
chicken has slightly decreased to 42.00 baht per kilogram
from 44.00 baht last week, but higher than 31.50 baht
in the same period last year. The price of chicks has
significant decreased to 8.50 baht per head from 10.50
baht last week, but higher than 3.50 baht last year.
China
In consequence of the relaxation of the ban on poultry
exports from Japan. It seems to China have more hopeful
than the previous in the chicken exports sector. However,
currently Japan and EU, the main market of chicken exports
could be noted that the both are mature markets. While
the low price strategy adopted by China's poultry production
enterprises in the global market is competitive, it
has limited competing power as poultry products are
consumer products, not capital goods.
Furthermore, China's low price strategy is bound to
threaten the local poultry industries in these importing
countries. It can be expected therefore, that the governmental
authorities in these countries will do their part in
preventing the access of China's poultry products into
their markets, as far as possible. So far, technical
barriers have been used against China's export of poultry
products. Even if China should one day overcome these
technical barriers by meeting all standards stipulated
by these countries, further obstacles in the form of
anti dumping objections can be expected.
In fact, China's population has more than 1.3 billion
people, and has income US$ 986 per capita (in 2002),
is classified as a country with lower middle income
levels. Within the country, there are more than 100
house holds with average income exceeding US$ 3,000
each year, which are equivalent to the average income
level of the households in developed countries. These
figures indicated that there are already 500 million
available consumers in China with the propensity for
year round consumption of poultry products. With further
economics growth of China, this group of consumers will
continue to grow.
In 2002, China's consumption of poultry meat totaled
5.8 million tons, with per capita consumption at a meager
4.5 kg. Most of the poultry meats in China's domestic
markets are sold to manufacturers of ham and sausages,
western fast food restaurants and hotels. Very little
of the more expensive poultry parts, like thigh and
breast meat, are sold directly to household consumers,
including the group with average household income exceeding
US$ 3,000.
With income distribution remaining largely unequal
in China, there are evidently gaps in household consumption
of poultry, which could be filled in the domestic market.
Indonesia
Chicken meat has been contributing more towards Indonesia's
national meat consumption. Post estimates the broiler
meat consumption in 2003 to reach 733 million tons,
or 3.4 kg per capita per year. With the expectation
for continued improvement tin the overall economy, consumption
in 2004 is forecast to continue grow to 791 million
tons or 3.7 kg per capita per year (215 million populations
in 2003). There is a trend and preference for Indonesia
consumers to consume medium birds (1.4 kg or slightly
over 3 pounds).
Feed accounts for about 60-65 percent of the cost of
chicken production and the feed industry in dependent
on imported corn, soybean, etc. Due to dependency on
imported raw materials, the domestic chicken industry
cannot complete with other countries. To reduce the
dependency on the imported corn, the Government of Indonesia
(GOI) in starting to encourage domestic corn industry
to increase production.
Most of the poultry production is still carried out
through contract or partnership with the large integrators.
Poultry farmers depend on them for day old chick supply,
poultry feed and other necessary inputs. With relatively
low per capita broiler consumption, an increasing population
and economic growth, prospects for further output growth
remains bright. However processing and cold storage
deficiencies continue to create bottlenecks in distribution
and marketing.
Halal certification was used as justification for the
barrier, thus the ban on imported chicken parts implemented
in September 2000 remains in effect. This is the problem
which foreign exporter is trying to seek a resolution
with GOI.
Saudi Arabia
According to Saudi Ministry of Agriculture (MOA), total
poultry meat production is forecast to reach 530,000
tons by the end of 2004, up about 4 percent compared
to the 2002 level of 510,000 tons. A higher production
increase is possible this year due to minimized problem
with New Castle disease and the expected operation of
newly licensed farm.
However local production increases remain tied to the
generous financial, technical and other assistance it
receives from the government to compensate for the higher
local production costs ranging from US$ 1,090 to 1,380
per tons. To lessen the effect of the higher production
costs caused by various factors such as heavy dependence
on imported feed, medicine, as well as high energy costs
due to the requirement for year around temperature control.
Chicken meat continues to be the most competitive source
of animal protein in Kingdom. The per capita consumption
of poultry meat in 2002 was estimated at about 40 kg.
Consumption of chicken meat and other foodstuffs decreases
significantly during Ramadan (the Muslim fasting month
this year starts 26 October) and during summer which
starts from the second week of June up to the first
week of September when millions of Saudi and expatriates
depart Kingdom for vacation.
Despite the various government subsides provided to
the local poultry industry, producers claim to have
difficultly competing with imports due to prices of
locally produced frozen chickens are usually higher
than those imported by at least 20 percent per kg. Couple
with even if locally produced chickens could match prices
offered by imported chickens, many institutional customers
would keep on buying imported chickens particularly
Brazilian broilers due to locally produced frozen broilers
as well as imported French broilers contain a high fat
and moisture content.
Total poultry meat and production imports are estimated
to reach 390,000 tons this year. The major exporters
are Brazil, France, China and US with amount of 251,387
ton, 101,758 tons, 25,000 tons and 1,932 ton in 2002,
respectively. However, it is expected that the outlook
for next year calls for a marginal increase of 5,000
tons due to the expected increase in local poultry meat
production.
United States
According to the latest report of Outlook for U.S.
Ag Trade recently released by USDA, it is expected that
in fiscal year 2004 US agricultural exports will exceed
the previous year, as worth US$ 57 billion, up US$ 1.5
billion from the revised estimate of US$ 55.5 billion
for 2003. As for poultry, it is expected that total
export value will rise up as a result of the Global
economic growth and a weaker dollar lead to increased
demand for US products. It is estimated that livestock,
poultry and dairy exports will be a record $12.4 billion,
up $800 million from fiscal 2003.
Indiana-based AgriStats and Ehrlich's Poultry Issues
Action Team are looking at way to help stabilize the
poultry industry on the eastern shore region of Delaware,
Maryland and Virginia. In the past the Producing poultry
costs in this region was more each year than producers
in other regions of the country because of pricey grain,
high chicken mortality rates and expensive electricity.
The four big poultry companies on the Delmarva Peninsula
have spent about 9 cents more to produce a chicken than
the industry average. Furthermore the region's chicken
mortality rate is high even though Delmarva companies
spent about $1 million more a year on vaccinations than
the industry average.
According to the Cold Storage report recently released
by the National Agricultural Statistics Service (NASS),
has showed that total frozen poultry supplies on July
31, 2003 were up 1 percent from last month but down
12 percent from last year's level. Total stocks of chicken
were down 1 percent from last month and down 26 percent
from last year's level.
Trading activity was steady to barely steady in the
East, and mostly steady in the remaining areas. Retail
demand was light to fair and food service was fair to
fairly good, best into fast food. Supplies were more
than sufficient for trade needs. In production area,
live supplies were moderate at desirable to heavy, mostly
desirable weights. In the parts structure, trading was
light to moderate.
According to the latest report from the National Agricultural
Statistics Service (NASS), chicks placements for meat
production in the 19 key producing states (week ending
August 23, 2003) decreased to 168 million chicks, down
slightly from last week and also down slightly from
the same week last year.
Cumulative chicks placements from December 29, 2002
through August 23, 2003 were 5.72 billion, down 1 percent
from the same period a year earlier. Estimated chick
placements in Georgia, Arizona and Alabama were 25,204
million, 24,485 million and 22,084 million, respectively.
Commercial hatcheries in the 19-state weekly program
set 206 million eggs in incubators, up slightly from
the last week and also up 1 percent from the corresponding
week a year earlier. Average hatchability during the
week was 83 percent (average hatchability is calculated
by dividing chicks hatched during the week by eggs set
three weeks earlier).
| F.O.B.
dock prices in Georgia, USA (cents per pound) |
|
Chicken
|
Aug
25 - 28'03
|
Aug
18- 22'03
|
Difference
|
1
yr. ago
|
| Whole
Birds (2 1/2 - 3 pound birds) |
68.75
|
68.50
|
0.25
|
64.25
|
| Line
Run Tenders |
206.50
|
205.50
|
1.00
|
177.50
|
| Breast,
Boneless Skinless |
207.00
|
210.50
|
-3.50
|
158.00
|
| Breast,
Whole |
104.00
|
106.50
|
-2.50
|
85.00
|
| Thigh
Meat, Boneless Skinless |
80.00
|
82.50
|
-2.50
|
60.00
|
| Leg
Quarters |
32.00 |
32.00 |
-
|
19.00 |
| Wings |
76.50
|
77.00
|
-0.50
|
53.00
|
*Quoted
prices are based on ice-packed USDA grade "A"
sized 2.5 to 3 pound birds.
Source: National
Agricultural Statistics Service (NASS) of USDA |
