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USDA International Egg and Poultry

19 October 2012

USDA International Egg and Poultry: ThailandUSDA International Egg and Poultry: Thailand

The Thai broiler industry has seen production costs increase with higher prices for soybean and corn; at the same time, prices for live broilers and chicken meat have declined due to a supply glut derived from increased broiler production.
USDA International Egg and Poultry

The official forecast for broiler production in 2012 is 1.4 million metric tons (MMT), however unofficial estimates are as high as 1.55 MMT in 2012 and 1.45 MMT for 2013. Unofficial estimates are for exports to grow 15% to 540,000 MT in 2012 mainly because the EU and several other countries lifted their bans on imported Thai uncooked chicken meat products. Domestic consumption of broiler meat continues to grow primarily because quick service restaurants (QSR) and ready-to-eat markets have expanded and chicken meat is less expensive than other meats.

The ongoing expansion of broiler production capacity in 2011 and early 2012, as well as fewer incidents of disease-caused damages, led to an increase in broiler meat production. It is anticipated that most producers will scale down their broiler meat production in the last quarter of 2012 and most of 2013 due to a significant reduction in prices for chicken meat products and escalating world prices for main feed ingredients (soybean meal and corn). Average live broiler production costs in the first 7 months (Jan-July) of 2012 were 36-38 baht/kg which are similar to those in the same period of 2011. The impact of higher feed prices was offset by sharply reduced chick prices for the first half of 2012. The costs of chicks in 2012 dropped to 6-13 baht/bird from an average of 16-18 baht/bird in 2011, because of a supply glut of chicks.

Despite the outlook of a decline in broiler meat production in 2013, Thailand’s broiler meat exports should grow another 7 percent to 580,000 metric tons. Most of the growth is expected to take place in markets other than the EU and Japan, including ASEAN countries Hong Kong, South Korea, UAE, and South Africa. The EU and Japan will remain Thailand’s major markets accounting for about 75-80 percent of total exports. Thailand could dramatically increase its exports of uncooked chicken meat if Japan and South Korea lift their bans on the import of uncooked Thai broiler meat. Countries that have already lifted their HPAI bans on Thai uncooked frozen chicken meat include the EU, Hong Kong, South Africa, Bahrain, and Russia.

Based on the export performance of the first half of 2012 and the fact that the EU lifted its ban on Thai uncooked broiler meat as of July 2012, total chicken meat exports are unofficially estimated to reach 540,000 metric tons, up 15 percent from the 2011 level. Thailand is expected to export 40,000-50,000 metric tons of uncooked products to the EU in the second half of 2012, thus increasing total exports of uncooked products to 100,000-110,000 metric tons. The remaining exports (430,000-440,000 metric tons) consist of cooked products. Since the EU lifted its ban of Thai uncooked broiler meat, Thailand gained about 92,610 MT of the EU’s quota for uncooked salted poultry meat and 5,100 MT for the uncooked unsalted poultry meat. The in-quota tariff rate is 15.4% while the out of quota rate will be €1,300/ton.

Trade sources reported that overall export prices for nearly all cooked chicken products appeared to decline in 2012 mainly because of accumulating stocks in Thailand as well as an economic turmoil in the EU that has led to sluggish demand for Thai chicken meat. The bulk of the chicken products used for exports consist of made-to-order products that are processed or prepared by heat (such as grilling, steaming, and boiling) and are usually puffed or seasoned (with salt, Japanese sauce, etc.).

Source: USDA/FAS GAIN Reports TH7093; Thailand Ministry of Commerce

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