It is estimated that poultry production in China could fall by 15 percent in the next year and a half. China’s historic decrease in poultry production is likely to be a boom for Brazil, Argentina, Poland, and Russia, while the United States is forced to sit on the sidelines after the Chinese government recently imposed anti-dumping duties on U.S. broiler exports for another five years.
The production downturn in China will lead to a shortage situation in that market, leading to high prices and a push to restore, as much as possible, supply in the market via imports of breeding stock imports, hatching egg imports or poultry meat imports,” according to Rabobank’s senior animal protein analyst Nan-Dirk Mulder in a “Global Quality Poultry Report,” published September 14. “This push will affect prices in international markets, and Brazil especially will benefit as it is the most competitive country which as direct access to the Chinese Market,” Mulder said.
The downturn in China’s poultry production is a result of China’s reliance on imports of grandparent breeding stock of broiler chickens. Over the past two years, China has seen a sharp reduction in breeding stock imports because of avian influenza outbreaks in the United States, United Kingdom, France, and the Netherlands. Bans of these countries has led to a 50-percent reduction in breeding stock imports with China becoming highly dependent on Spain and New Zealand.
Mulder said the shortage supply in China may spark investment for China to improve its value chain, which could be positive news for equipment manufacturers, which may see cash-rich China buy into U.S. or European machinery.
Meanwhile, the Obama administration this week filed another World Trade Organization dispute against China, accusing China of exceeding allowable subsidy levels for corn, wheat, and rice. The case is the 14th action the White House has taken against China and the 23rd overall. President Obama noted, in a rare statement accompanying the trade action, that the United States have won every one of those 23 cases.
