China banned all exports of poultry from the U.S. in January 2015, following the first outbreaks of highly pathogenic avian influenza (HPAI). USDA Foreign Agricultural Service (FAS) reports that China was able to boost its production of chicken meat (excluding feet and paws) in 2015, but output is forecast to fall this year. There is likely to be an increase in the volumes of chicken meat imported in 2016.

FAS has revised its estimate for 2015 chicken production in China upwards to 13.4 million metric tons (mmt) due to higher production of white-feathered broiler meat. It has also adjusted its forecast for 2016 production down 3 percent to 12.7 mmt, which is less than the 13.0 mmt produced in 2014.

The fall is attributed to China’s challenges in sourcing grandparent stocks for white broiler meat. Before the ban on imports, the U.S. supplied around 90 percent of the imported requirements with France and New Zealand accounting for the rest. In late November 2015, France reported its first outbreaks on HPAI and China banned imports from that country too. To deal with reduced grandparent stocks, FAS reports some Chinese operations are molting their white-feathered breeder flocks. A 10 percent reduction in white-feathered broiler meat production is unlikely to be compensated completely by increased output from native yellow-feathered meat birds.

Chinese chicken consumption estimates

Consumption of chicken meat last year is estimated at 13.27 mmt but this is forecast to fall to 12.72 mmt in 2016. FAS attributes the changes to the economic slow-down in China is closing factories, which has led to the closure of factories in whose canteens white-feathered broiler meat was once widely consumed by workers because of its low cost. In supermarkets, white-feathered broiler breast meat is less popular than wings, legs, and paws.

Native yellow-feathered birds are mainly sold in wet markets. Fears of spreading avian flu to people has led the government to push for an end to live bird slaughtering at such locations.

Chicken imports and exports

As for imports, FAS estimates that these were up from 260,000 metric tons (mt) in 2014 to 270,000 mt last year. Its forecast for 2016 has been increased to 400,000 tons. Brazil is thought to benefit most from the rise in imports but volumes from Argentina, Chile and Poland are also thought likely to grow.

FAS estimates for Chinese chicken meat exports are put at 400,000 mt in 2015 – down from 430,000 mt in 2014 – and a further decline to 380,000mt is forecast for this year. Japan and Hong Kong are the leading destinations for Chinese poultry, accounting for three-quarters of the total.

China has filed a complaint with the World Trade Organization over the small low-tariff quota awarded to its chicken meat imported into the European Union.

An indication that Brazil is among the beneficiaries of China’s ban on imports of U.S. poultry products came earlier this week, when it was reported that three poultry and pork plants operated by BRF in Brazil have received authorization to export to China.

Last week, poultry market stalls in Macao were ordered to suspend sales for 3 days and carry out cleaning and disinfection after an H7 avian influenza virus had been detected in birds at wholesale markets in the territory. An official Chinese source reports that around 15,000 live chickens from Guangdong province and all the poultry in the wholesale market were culled as a result of the virus detection.