According to FAO’s May 2014 Food Outlook, global poultry production, “after limited growth in 2013”, is “anticipated to rise by 1.6% to 108.7 million tonnes in 2014”. The largest expansion in production is projected in developed economies, as growth of production in developing countries will be dragged down by the expected 1.7% decrease in Chinese poultry production in response to the avian flu outbreak of 2013.
US poultry production is expected to rise by 1.8% to a record 20.6 million tonnes, while EU production is expected to increase by 0.8%. Brazil and Mexico are also expected to show some production gains, while production in Russia and India is projected to increase by 8% and 6% respectively.
Russian government policy initiatives to increase domestic poultry production led to a fall in EU chicken exports to Russia of 18% in 2013, and a further decline of 2% is expected for 2014, as EU poultry meat exports fall to “less than half of what they were in the mid-2000s”.
According to FAO, the global trade in poultry meat has doubled in the past decade, with growth slowing down in 2012 and 2013 and a 2.4% increase anticipated in 2014. FAO notes that “the four leading exporters, Brazil, the United States, the EU and China, which together account for almost three-quarters of global trade, have seen little expansion in sales in recent years.”
FAO highlights the differing geographical focus of the second tier exporters, Thailand, Turkey, Argentina, Ukraine and Belarus. Of these, the first three “are projected to continue recording strong growth in 2014”, and “each has focused on a different region or market segment”:
- Thailand – mainly the Japanese market and EU markets for boneless poultry cuts and prepared poultry meat;
- Turkey – mainly Middle Eastern markets;
- Argentina – mainly Latin American markets (but looking to broaden its focus by targeting markets in China and South Africa, among others).
In Africa, imports are forecast to increase by 4.8%, well above the average increase in world trade. Ghana and Benin are among the countries where imports are projected to increase most, “as income growth strengthens demand”. In South Africa, which is the major African destination for imported poultry meat imports, imports in 2014 are projected to remain unchanged.
In terms of price, between 2009 and 2013, US and Brazilian dollar-denominated poultry meat reference prices were 24.3% and 29.8% higher respectively. More generally, the FAO poultry meat price index rose from 162 in 2009 to 206 in 2013 (+27%). The 2013 FAO annual price index figure, however, masked the continuous fall in poultry meat prices from the third quarter of 2013. These declines stabilised in 2014 at 189, an index level only 16.7% above the 2009 level.
The FAO assertion of limited expansion in exports by the four leading exporters in recent years does not hold for the EU – between 2010 and 2013, EU exports of poultry meat (mainly poultry parts) grew by 13%. More specifically, EU poultry meat exports are increasingly focusing on African markets. Exports from the EU have been a major contributing factor in sub-Saharan Africa increasing its share of total global poultry meat imports from 4% in 2000 to 10% in 2011 (see Agritrade article ‘ Poultry exports to Africa continue to grow’, 19 January 2014). African markets could become even more important if political tensions with Russia lead to a more rapid decline in EU poultry meat exports to Russia than FAO projects.
Most recently, because of the tariff preferences enjoyed, the EU has focused on the South African market (see Agritrade article ‘ South Africa selectively raises duties on five poultry items within WTO...’, 17 November 2013). This could well displace poultry meat from other suppliers (including potential Argentinian poultry meat exports) to markets in West Africa (Ghana and Benin) and Southern Africa (Angola).
In view of African efforts to integrate regional markets and the “footloose” nature of trade in frozen poultry parts (which responds rapidly to government policy changes), regional policy harmonisation in the poultry sector would appear essential if the trade in smuggled poultry products – which carries a heightened risk of serious food poisoning as a result of the repeated defrosting and refreezing of the smuggled product – is to be contained.