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China Poultry Industry Faces Downturn

The impact of bird flu and the economic slowdown may have cut China’s poultry numbers by about a third or more in the last month, executives in the poultry feed industry said March 3.

Although China has not disclosed any significant outbreaks of bird flu or the extent of the impact on the industry, feed company executives say the sector has suffered a dual blow from disease and a drop in demand that could keep stocks in short supply into the third quarter.

“There have been very few restocks after the Chinese Lunar New Year. Poultry stocks could have fallen by 30 to 40 per cent compared to last year,” said one executive from a leading feed and poultry producer.

Families traditionally feast over the Lunar holiday, which fell at the end of January this year, causing a bump in demand.

Chinese officials have said 20 million migrant labourers have lost their jobs after factories making export goods such as toys and textiles closed because of the global economic recession. That has slashed demand from factory canteens.

“With many migrant labourers returning home, consumption of meat and eggs has fallen and pig prices are also down a lot because of the high stocks of pigs and low consumption,” said Sun Zhiqiang, an official with China Feed Industry Association.

But feed officials told Reuters that outbreaks have also killed much of the poultry-breeding stock, driving up prices for young chicks.

Analysts at Rabobank say animal feed accounts for two-thirds of corn demand in China.

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