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Escalating bird flu crisis jeopardizes global poultry trade prospects
Reduced consumption is lowering poultry prices and import demand
28 February 2006, Rome - Recent avian influenza outbreaks in Europe, the Middle East and Africa have caused dramatic swings in poultry consumption, increased trade bans and sharp price declines, FAO said today.

The UN agency expects poultry consumption shocks this year in many countries in Europe, Middle East, and Africa that have been hit by avian influenza. As unfounded fears of disease transmission reduce consumption and imports, lower domestic prices are forecast to limit production growth.

“A steady erosion of previously expected gains in per caput poultry consumption will likely push down global poultry consumption in 2006, currently estimated at 81.8 million tonnes, nearly 3 million tonnes lower than the previous 2006 estimate of 84.6 million tonnes,” said FAO commodity specialist Nancy Morgan.

At the onset of avian influenza outbreaks in early 2004, lagging consumption in Asia and the loss of export markets for regional supplies led to an 8 percent decline in international trade. Up until recently, international poultry prices had been driven up by over 30 percent because of declining exportable supplies.

Developments in 2006 indicate a very different market environment. Consumption shocks are progressively lowering global import demand for broiler parts. Poultry prices are expected to continue declining, threatening industry profitability around the world and household livelihood and rural employment opportunities in developing countries.

Consumption shocks

In Europe, consumption shocks are ranging from a dramatic 70 percent decline in Italy in mid-February to 20 percent in France and 10 percent in northern Europe. These responses are similar to the European situation in late 2005 when widespread consumer concerns about bird flu outbreaks contributed to an annual one percent consumption drop in 15 countries in the EU.

In Africa, consumers in affected countries, such as Egypt and Nigeria, are moving away from poultry and egg products as are consumers in surrounding non-affected countries. In India reports of consumption drops of 25 percent have caused domestic prices to fall 12-13 percent, implying lower production prospects.

Sharply reduced international poultry prices are raising uncertainty among exporters about trade prospects in 2006. As consumers look for alternatives to poultry, global trade prospects will likely erode from the 10 percent gains witnessed in 2005. FAO’s global poultry trade projection for 2006 has been revised down 500 000 tonnes form the previous estimate of 8.6 million tonnes.

In the United States, export prices for broiler cuts, after rising to record levels in October, dropped 13 percent as a result of declining shipments to Eastern Europe and Central Asia in November and December.

In Brazil, where exports account for approximately 30 percent of total poultry output, the price of day-old chicks, an early warning indicator of potential production changes, is down sharply. Brazil and the United States are supplying approximately 70 percent of global poultry trade. The largest poultry producers and exporters are the United States, Brazil and the EU.

Livelihood risks

Backyard producers in many developing countries are losing income and are facing increased livelihood and food security risks. In Nigeria, for example, some producers are losing their means of livelihood as birds are culled and prices drop and employees on farms are losing their jobs.

The crisis has also affected the $42 billion dollar feed sector in Europe, with demand losses estimated at up to 40 percent in some countries.

Around 200 million chickens have been culled or have died of the disease since the onset of the crisis in late 2003.

FAO stressed that poultry products, properly cooked at or above 70° Celsius throughout the product, are safe to eat. It also noted the importance of preventing products from infected flocks to enter the food chain.


Contact:
Erwin Northoff
News Coordinator
erwin.northoff@fao.org
(+39) 06 570 53105
(+39) 348 25 23 616

Contact:

Erwin Northoff
News Coordinator, FAO
erwin.northoff@fao.org
(+39) 06 570 53105
(+39) 348 252 3616

FAO/18582/R. Faidutti

World poultry consumption is expected to decline due to the bird flu crisis.

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Escalating bird flu crisis jeopardizes global poultry trade prospects
Reduced consumption is lowering poultry prices and import demand
28 February 2006 - Recent avian influenza outbreaks in Europe, the Middle East and Africa have caused dramatic swings in poultry consumption, increased trade bans and sharp price declines.
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