According to EC short-term prospects for the EU meat sector, ‘the recent growth in poultry meat production is set to continue… After a 1.1 per cent increase in 2011, EU poultry meat production is expected to keep growing (+1.0 per cent in 2012 and +0.3 per cent in 2013).’ This is despite a projected 0.4% decline in EU poultry meat consumption in 2012, with only a slight recovery in 2013 (+0.3%). However the share of poultry meat in total EU meat consumption is growing as consumption of other meats declines more sharply.
As a result of these trends, ‘the very dynamic trend of EU poultry exports would continue in 2012, with a projected increase of 14%, driven by global demand.’ This will mean that EU broiler meat prices stay ‘slightly above the average’, despite the decline in EU poultry meat consumption. According to the EC figures, EU poultry meat exports are projected to have increased by 61.5% between 2009 and 2013, from 929,000 tonnes to 1,500,000 tonnes.
Meanwhile, according to the OECD-FAO Agricultural Outlook 2012-2021 report, increases in grain feed prices over the past 5 years have already taken place in the poultry chain. Globally, in the coming years ‘real prices for poultry are projected to remain close to current levels’, with strong prices encouraging ‘large meat-exporting countries to invest in international meat markets despite the high prevailing incidence of food-safety and sanitary import bans’. Demand for poultry imports in developing countries will grow considerably as a result of population and income growth. Poultry remains the fastest-growing meat sector reviewed by the OECD-FAO, with projected growth of 2.2% per annum.
Developing countries are projected to increase their share of global poultry production to 63% by 2021/22. Poultry production will take place in increasingly larger units to gain economies of scale ‘not only in developed but increasingly in emerging countries’. This trend towards larger production units will also increase the poultry sector’s dependence on feed grain inputs.
In July 2012, complaints over poultry imports from Brazil and the EU were voiced in Uganda, where it was claimed that local chicken producers were ‘losing ground on sales due to the continued entry of cheap imports from Brazil, South Africa and Europe’. A report presented to President Museveni claimed that ‘about 45 per cent of dressed chicken sold on the Uganda market is imported’ at 19 to 35% less than local prices.
According to press reports, while Ugandans consume ‘30,000 kilograms of dressed chicken every week’, production is currently around 60,000 kg of chicken per week, with strong regional exports to South Sudan, Burundi, Rwanda and DRC.
Elsewhere in Africa, fears of competition from large integrated poultry producers are giving rise to considerable debate over the use of trade policy tools. In Namibia, for instance, infant industry protection for the poultry sector has recently been invoked, but poultry traders are resisting implementation of the measure. A Namibian newspaper reports that ‘South African poultry companies that export poultry products within SADC are suggesting that SADC considers banning products from outside the region, instead of putting up restrictions within the regional trade block.’
The concentration of poultry production in ever larger production units is likely to pose market challenges for small-scale poultry production systems across the EU and in ACP countries. With animal disease and food safety concerns periodically disrupting international trade in poultry meat products, this is likely to lead to increasingly complex trade policy challenges in ACP countries where small-scale poultry production systems dominate.
The trend towards increasingly larger production units in emerging countries could result in particular challenges for intra-regional trade policy formulation in certain ACP regions, such as Southern and Eastern Africa, where in some countries large-scale highly integrated poultry production systems dominate regional poultry production.
Efforts to develop feed grain sources that do not compete with human food demand could potentially offer an important means of reducing costs to small-scale poultry producers in a number of ACP countries and regions (see Agritrade Executive brief: Update ‘Poultry sector’, 30 August 2012).