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USDA International Egg and Poultry

21 October 2014

USDA International Egg and Poultry - Thailand - 14 October 2014USDA International Egg and Poultry - Thailand - 14 October 2014

USDA International Egg and Poultry


Chicken meat productionis estimated to grow only modestly in 2014 and 2015. So far in 2014, integrated processors’ profitability remains favorable since higher production costs are well offset by favorable prices for chicken meat. Post’s unofficial estimate is for chicken meat exports in 2014 is 530,000 metric tons (MT), up 5% compared to 504,376 MT in 2013. This is lower than the official estimates in April 2014 of 580,000. About 80% of total exports in 2014 are expected to consist of cooked chicken meat products. Unofficial forecasts are for Thai chicken meat exports to further increase by 6% to 560,000 MT in 2015 in anticipation of growing export demand.

The Thai broiler industry has enjoyed a period of profitability since the second quarter of 2013. Despite strong earnings, trade sources report that integrated poultry producers are still taking a cautious approach to expanding their farming and processing facilities. An outbreak of New Castle disease in several breeding and broiler farms have contributed to the restrained approach but did not significantly reduce poultry output. As a result, chicken meat production is estimated to grow modestly by 5% annually in 2014 and 2015 (unofficial).

Integrated producers implement strict bio-security measures and most have evaporative cooling systems. The closed-farming system has been instrumental in preventing a return of HPAI incidents. The industry has also utilized new technologies that have improved genetics, farm management, and feed nutrition. As a result, the average weight of fully grown broilers at slaughter reportedly increased to 2.3-2.4 kilograms per bird from 2.0-2.1 kilograms per bird in the past 4-5 years. The number of days it takes to raise one-day old chicks to market delivery, dropped to 42 days from 49 days, and average feed conversion ratio (FCR) decreased to 1.7 from 1.9-2.0 over the same period.

So far in 2014, higher production costs are well offset by favorable prices for chicken meat. As of August of 2014, current average production costs stood at 41 baht/kg (58 US cents/pound), which is broken down as follows: day-old chicks (9 baht), feed (26 baht), vaccination and drugs (one baht), and labor and other costs (5 baht).

Despite prevailing high prices for retail chicken meat in 2014 and unfavorable economic situation driven by a political turmoil and a military coup, domestic consumption is estimated to grow 3% in 2014 mainly because of skyrocketing domestic pork prices. Average retail prices for boneless chicken breast meat for the first half of 2014 increased by 2% to 83.16 baht/kg ($1.18/pound) compared to 81.64 baht/kg ($1.16/pound) in the same period in 2013. Most Thais still buy fresh chicken meat from traditional markets, which account for about 60-70% of total chicken meat sales. Trade sources expect chicken meat consumption in the ready-to-eat and quick service restaurant (QSR) sectors to continue to grow by 5-8% annually for the next 5 years.

In December 25, 2013, Japan’s Ministry of Agriculture, Forestry and Fisheries notified Thailand that it decided to immediately reopen its markets to imports of Thai frozen uncooked chicken. Thailand’s uncooked chicken was banned in January 2004 when an outbreak of highly pathogenic avian influenza (HPAI) bird-flu was detected. Other countries that have also lifted their HPAI bans on uncooked Thai frozen chicken meat include the EU, Hong Kong, South Africa, Bahrain, Russia, United Arab Emirates (UAE), and Qatar.

So far in 2014, overall export prices for nearly all cooked chicken products were favorable following strong export demand from the EU and Japan. This price situation is expected to continue for the rest of the year.

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.).

Thailand is annually granted 92,610 MT of the EU’s uncooked salted poultry meat quota and 5,100 MT for uncooked unsalted poultry meat. The EU quota for cooked chicken meat from Thailand (EU HS code 16023219) is 160,033 MT. In March 2013, the EU granted Thailand an import quota of 14,000 MT per annum for cooked chicken meat products containing 25-57% chicken meat and 2,100 MT per annum for cooked chicken meat products containing less than 25% chicken meat.

Thailand is a highly protected market and the government picks and chooses what type of poultry meat is allowed for import. U.S. chicken meat products are practically banned through non-transparent import permit control (potential importers are unable to get them issued). In addition high import tariffs (30% for chilled or frozen uncooked meat and 40% for cooked chicken meat), and a discriminatory import permit fee on uncooked products (10 baht/kilogram or approx. US$317/MT) are employed to protect the domestic market. Thailand has submitted an application to USDA’s Food Safety Inspection Service (FSIS) requesting approval to export cooked chicken to the United States. However, Thailand has not seriously pursued this endeavor and the request remains pending.

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