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GLOBAL POULTRY TRENDS - Asia Leads the World in Chicken Demand

17 June 2010

Global Poultry Trends 2010

With a growing human population and rising incomes, Asia is the region leading the growth in world chicken meat consumption, writes Terry Evans. This, the first of a series of special features entitled Global Poultry Trends for TheMeatSite, covers the production of chicken meat in Asia.

Asian countries are leading the world economic recovery out of the recession providing a positive backdrop to the key drivers to boost the demand for chicken – population growth, rising disposable incomes, urbanisation and improved price competition against competitors. Although population growth is slowing, the global total continues to head towards 9.2 billion in 2050. Faster economic growth in the developing countries is lowering poverty rates enabling more people to buy meat. Cities, now home to almost half of the world's people, are growing rapidly in size and number such that by 2050, the world's urban population will have doubled to 6.4 billion. At the production level, continued improvements in the genetic development of the stock and also in management practices have meant that chicken has maintained its competitive position against red meats at retail level.

Worldwide, chicken meat production represents around 86 per cent of poultry meat output, however, in Asia this figure is a little lower at around 85 per cent. But, in China it dips as low as 72 per cent because of the production of large quantities of duck and goose meat, the combined output of which is around five million tonnes a year.



Figure 1. Chicken meat production in world, Asia and China




Figure 2. Chicken meat production in other Asian countries

After a recession-induced near stagnant production in 2009, global poultry meat output is expected to recover by some three per cent or so this year to an estimated 95 million tonnes. Of this, some 82 million tonnes will be chicken meat.

Chicken meat production in Asia is out-pacing the global average such that in 2010, it is estimated that output will come close to 29 million tonnes out of a poultry meat total of some 34 million tonnes. Asian chicken meat output will represent about 35 per cent of the global total compared with around 32 per cent back in 2000 (Table 1).

The figures presented from 2000 to 2008 have been abstracted from the Food and Agriculture Organisation's (FAO) data, with the exception of China, the most recent figures for which have been taken from a report from the Foreign Agricultural Service of the USDA. The 2010 estimates are based in production trends in recent years.

At the outset, it should be appreciated that data often differ depending on the source. Hence, the most important aspect of any series is the trend rather than the absolute levels shown. This point is underlined by the likelihood that the margin of error for individual figures can vary as widely as plus or minus 20 per cent in poor developing countries to five per cent even in developed economies.

As is clear from tables 1 and 2 (click on the tables to enlarge), China is easily the leading producing nation in the region accounting for around 44 per cent of total output. However, this country's share has actually declined since 2000 - when it stood at 48 per cent – as other countries in the region have expanded production more rapidly. For example, while China's output looks to have risen by almost 39 per cent during the current decade to an estimated 12.6 million tonnes this year, the corresponding figures for India, the region's second largest producer, reveals a much more dramatic expansion of 145 per cent with production currently around 2.7 million tonnes.

Apart from India, other Asian countries with sizeable annual chicken meat output, recording faster industry growth than China are Myanmar, Pakistan, Iran, Indonesia, the Yemen, Bangladesh, Turkey, Israel and the Republic of Korea.

Click to view larger image

Click to view larger image

Additionally, there are a number of countries in the region producing relatively small quantities of chicken meat that have made gains, well above the world average of 39 per cent for the decade or 3.3 per cent a year.

While table chickens in this region vary greatly in size at killing age from around 800g (eviscerated weight) to 2kg, the overall average for the region of just under 1.3kg is below the global figure of 1.5kg. Hence, while Asia may account for some 40 per cent of all chickens slaughtered, the yield of chicken meat represents a smaller percentage of the world total at around 35 per cent.

Of the 47 countries just eight, each producing around, or more than, a million tonnes a year, account for some 23 million tonnes or nearly 80 per cent of the regional total. All of these, with the exception of Japan, are exhibiting positive growth.

A universal characteristic of the chicken business has been the growth of large integrated companies. However, in order to maintain expansion a number of these have become global poultry enterprises. In particular, has been the establishment of American operations in Asia and especially China, while within the region, Thai and Japanese companies are now operating outside their national borders.

Looking to 2019, the US Food and Agricultural Policy Research Institute (FAPRI) expects China's chicken meat output to exceed 15.6 million tonnes. This is not surprising considering that China is encouraging foreign investment through joint ventures in large-scale operations which are accounting for an increasing share of national production at the expense of village or back-yard production.

By the end of the next decade, output in India will likely come close to 3.25 million tonnes.

Thailand's industry, which took a massive knock as a result of the outbreaks of the highly pathogenic avian influenza (HPAI) virus in 2004, has since recovered and now the annual output has climbed back to 2000 levels, while the FAPRI forecast for 2019 currently stands at 1.6 million tonnes.

No expansion is foreseen for Japan and indeed some contraction could occur in the face of keen competition from imports such that production towards the end of the next decade may fail to exceed 1.25 million tonnes.

Underlying Iran's confidence in its industry has been the inauguration earlier this year of what is claimed to be the largest poultry slaughterhouse in the Middle East.

Turkey's industry is also optimistic about continued expansion to a possible 2.8 million tonnes in the next decade. However, the fact that producers are now coping with higher feed costs and a regulation that prohibits the use of genetically modified feed ingredients, may have tempered this view.

FAPRI considers that production in the Philippines could exceed 900,000 tonnes by 2019, while output in Saudi Arabia and the Republic of Korea will be between 700,000 and 800,000 tonnes.

Look out for more articles in this special series in the coming weeks!

June 2010

 

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