Asia’s appetite for chicken meat will dominate rising global poultry consumption over the coming years, and demand for eggs will also be higher.
It will outstrip many other regions of the world, in part because of rising income levels and improvements in production efficiency, but also because, in many Asian countries, consumption levels remain relatively low, meaning that the region offers a potential not present in more developed markets.
While forecasts vary, many believe the world’s consumption of poultry meat will have grown by 27 percent by 2023, and 40 percent of this growth will be attributable to Asia.
The current state of Asian poultry and egg markets and future trends were examined during "Global Poultry Trends – Effect on the Southeast Asian Market," which took place on the opening day of VIV Asia 2015.
The region would appear to have a bright future, but it is not without difficulties that need to be addressed by Asia’s chicken meat and egg farmers if production and consumption are to meet their full potential.
Obstacles include disease scares, such as avian influenza H7N9 and H5N1; concerns over food safety; high feed costs; slowing rates of GDP growth; the inability of producers to respond to changing demand patterns; weak product promotion; natural disasters, such as typhoons in the Philippines; poor infrastructure; and, more recently, import bans on genetic stock.
Asian broiler growth gaining global share
Despite these difficulties, Southeast Asia is expected to account for 36 percent of the increase in global poultry production forecast to take place between 2013 and 2023, delegates at the event hosted by WATT Global Media and sponsored by Cobb and Moba, were told.
Incomes in Asia are rising by more than 5 percent per year, and poultry, in addition to being the cheapest meat, is the most elastic to income growth because of its short production cycle.
Per capita consumption of poultry meat in many of the region’s countries is low, meaning that, as incomes grow, there is room for consumption to expand with it. Malaysia, for example, sits at the high end of the scale at 49.5 kg per year while, at the other, annual per capita consumption of poultry meat in Bangladesh is only 1.4 kg.
By 2023, China’s broiler meat production is expected to have risen to 4 million metric tons (MT), an increase of 17.5 percent, India’s to 2.8 million MT (+5.1 percent), Indonesia’s to 2 million MT (+3.5 percent), while Thailand will be producing 2.4 percent more at 0.75 million MT.
Yet, growth in the region will be weaker than was once thought, explained Pelayo Casanovas, general manager Cobb Asia Pacific.
Drive for production efficiency
Casanovas continued that the region’s poultry producers will have to become more efficient if they are to continue to supply Asia’s consumers with affordable chicken meat and respond to growing demand.
Many Asian countries are relatively high cost when compared with the U.S. and Brazil, and this, in part, is due to comparatively low levels of integrated production in the poultry industry, which will need to change.
If supply is to better match consumer demand, there will need to be greater integration, the formation of more cooperatives, and more consolidation across the region. Thailand has the most integrated poultry industry, with 85 percent of standard broiler production produced by integrated companies. In most countries, however, the figure is less than 60 percent and, in Myanmar, that figure falls to 25 percent.
The region continues to be hampered by the large proportion of chickens sold through wet markets, and more consolidation, integration and modernization would not only result in an improved supply and demand balance and achieve greater efficiencies, but would also help to improve traceability and food safety.
Additionally, the size of chickens produced in Asia is likely to rise. The greatest increase in bird size is forecast to occur in Indonesia. The country produces chickens that are an average of 1.5 kg live weight at processing. This is predicted to increase to 1.85 kg by 2023. In Thailand, the increase is expected to be in the region of 22 percent from today’s 2.45 kg to 3 kg by 2023.
At a macro scale, integration is happening. The member countries of the Association of Southeast Asian Nations (ASEAN) have said they will form a single economic community this year. Within the area, 99 percent of products will have their tariffs lowered to the 0-5 percent range, which should boost trade between the member states. There is also a commitment to expand the bloc’s free trade area to other countries, and the grouping is expected to be the world’s biggest trading bloc by the end of the decade.
Casanovas ended by saying that the region’s industry must bring avian influenza under control, convince consumers of the safety and benefits of poultry meat, and keep production costs under control.
Strong growth ahead for egg production
Asia is currently home to 2,230 million laying hens. By comparison, Europe is home to 609 million, while North America has just 369 million.
Economic growth and changing consumer tastes in the region and rising living standards are having an impact on egg production. For example, by 2020, the share of backyard production is expected to have fallen to 30 percent, from 80 percent in 2006, while the share of eggs supplied to the market by large farms will have grown from 4 percent to 30 percent over the same period. Wet markets will continue to decline and the role of supermarkets will continue to grow.
Asian egg production is expected to account for 76 percent of the predicted growth in world production, but for this growth to be realized, there will need to an increase in automation in egg handling, explained Paul Buisman, product manager Moba Group.
Currently, 42 percent of egg handling worldwide is automated. In Asia, however, this figure stands at just 19 percent. The rate of increase in automation in Asia stands at 4 percent year on year, however, egg companies throughout the region will need to become increasingly automated, to reduce the number of eggs lost and to shorten the time to market. This will also help them to ensure food safety and traceability.
The compound annual growth rate of egg production in Asia stands at 3 percent, and Asia is already home to two of the world’s 10 largest egg producers when measured by millions of layers – Japan’s Ise Inc. and Thailand’s CP Foods, but there are least 15 companies with laying flocks numbering in excess of 2 million head in the region.
Buisman looked at the example of Chinese egg producer DQY as an example of how the region’s companies are growing. In 2001, the company had no laying hens. By 2002, however, it had 200,000 birds in place, rising to 1.2 million layers in 2006, and reaching 1.6 million in 2009.
As in broiler production, food safety is also an issue in the region’s egg sector, and producers will need to reduce the chances of cross contamination during production, and improve the cleaning and disinfection of equipment if they are to make the most of growing and changing consumer expectations.
