EU broiler production, consumption forecast to rebound

By Ahmed ElAmin

- Last updated on GMT

Related tags Eu European union World trade organization

EU broiler production in 2006 is forecast to be four per cent lower
than last year due to the outbreaks of avian influenza (AI), but
looks set to rebound in 2007, according to a new report.

Production is down from the record achieved last year. However reduced demand is also affecting the industry. So far the EU has built up commercial stocks amounting some 300,000 metric tonnes at April 2006, as a result of lower demand due to consumer fears about AI.

Consumption is forecast to decrease by 1.3 per cent overall in 2006, but regional differences are large between the south and the north of Europe, according to a report by the US Department of Agriculture's GAIN analysis unit.

In Greece and Italy, temporary consumption decreases of 90 and 70 per cent respectively were reported. In contrast consumption in the UK and some of the new member states increased, benefiting from depressed prices for the meat.

EU broiler production in 2006 is expected to decrease by four percent compared to 2005, due to severely depressed poultry prices and market volatility.

Chicken production started to decrease in Greece and Italy, as AI outbreaks in Romania, Turkey, and subsequently Greece, were turning consumers away from poultry consumption.

The situation also forced producers in other EU countries to reduce chicken production, especially in those Mediterranean states that are highly export oriented, such as the Netherlands, Germany and Denmark.

The report's analysts expect EU chicken exports to decrease significantly during 2006, as a result of decreased demand in world markets because of the AI crisis and a glut of cheap poultry from Brazil and the US.

EU exports over the first four months of 2006 were down 22 per cent, mainly as a result of the partial and full bans on chicken from France, after its AI outbreak in a commercial turkey flock in February 2006.

The end of the ban on French poultry exports, as well as some easing of the international AI impact on poultry consumption, are expected to allow EU chicken exports to partially recover over the rest of 2006.

Meanwhile chicken imports into the EU are expected to increase in 2006 by 15 per cent or more because imports at reduced tariff are allowed in again from Brazil and Thailand after 27 June. The increase is a consequence of the EU loosing an appeal before the World Trade Organisation over tariffs on salted poultry.

"Already cooked poultry imports from Thailand had been increasing after that country had converted to cooked products as a way to bypass the AI-related ban on fresh poultry exports to the EU,"​ the USDA reported.

The lost WTO case on "salted poultry" by Brazil and Thailand appeal means that cheap imports of poultry can again squeeze uncompetitive EU producers out of the market, the USDA noted.

"The main problem for the EC is that they don't have any adequate tools to manage the poultry market, especially if export refunds are being phased out as part of a WTO agreement in the Doha negotiations,"​ the analysts stated.

The EU turkey situation is in similar situation, with decreased production, decreased exports and decreased consumption in 2006 because of AI. Imports are also increasing. The difference is that turkey markets are not expected to recover, but rather continue their long-time decline, the USDA stated.

The EU's top poultry producers are the UK, the Benelux countries, Spain, France, and Italy. The top consumers are the UK, Spain, Germany, France and Italy.

The EU is expected to produced about 8.025 million metric tonnes of broiler meat this year.

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