China's reopening little benefit to local poultry industry

Chicken meat output will be only marginally higher in 2023.

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A plump young asian woman, dressed in a green suit, eats hamburgers while working on a laptop in a fast food restaurant.
A plump young asian woman, dressed in a green suit, eats hamburgers while working on a laptop in a fast food restaurant.
The Chinese economy may have reopened, but the benefit accruing to the poultry industry is expected to be only gradual. somethingway | istock.com

The reopening of the Chinese economy at the end of last year should lead to a domestic economic revival, according to research body Swiss Re Institute. This revival will be led by a recovery in domestic services, such as hospitality. 

Despite the upturn, latest reports suggest that chicken production may not benefit from this change as much as might have been expected. With difficulties in sourcing genetics and changes to how chicken is sold in the country, output this year will be broadly similar to that of 2021.

The latest report from the U.S. Department of Agriculture Foreign Agriculture Service (FAS) suggests that China’s chicken production this year will reach 14.3 million metric tons (MT). Production of white feather birds will increase slightly, while that of yellow feather birds will decline. 

While demand for and production of white feather birds may be rising, producers are being held back by ongoing restrictions on genetics imports. 

The industry heavily depends on imported genetics and, last year, several major exporting countries reported outbreaks of highly pathogenic avian influenza (HPAI), hampering their exports. Imports from these countries declined by almost 60% last year, while imports from New Zealand fell by 85%. 

Where the yellow feather sector is concerned, although some large-scale producers continue to make gains, this is said to not be enough to overcome the losses reported by small and medium-sized businesses, which will continue to exit the market as the year progresses. 

The yellow-feather sector is being particularly affected by the closure of live bird markets and a consequent shift to pre-slaughtered/chilled products.

Consumption

Consumption this year is forecast to reach 14.4 million MT, held back by difficulties in supply. Rising prices for chicken meat, however, have encouraged some producers to invest in new vertically integrated facilities, and a number of these are expected to come on stream this year. 

Consumption of white feather birds is forecast to grow in schools and company cafeterias, hotels, caterings, quick service and dine-in restaurants in response to lifting COVID-19 restrictions and import testing requirements. However, the recovery in this sector will be gradual.

Poultry imports and exports

Imports of chicken meat, excluding paws, are expected to decline slightly over 2023 to stand at 630,000 MT. 

Among reasons cited by FAS for this decline are HPAI-restrictions placed on the U.S., among others. 

Imports are likely to continue growing from countries that have remained HPAI-free, particularly Brazil, however, imports from Brazil are subject to anti-dumping measures.

Where overseas sales are concerned, China’s chicken meat exports are forecast to reach 555,000 MT, with continued demand from markets including Hong Kong and Japan. Exports to these markets are dominated by further processed and value-added products. 


Outlook for China’s poultry industry flat in 2023

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