January 27, 2021
China lifts Thailand's poultry trade
Adapting to China's desire for frozen poultry and redirecting cooked meat exports from Europe to Japan, Thai broiler exporters made the best of a bad year.
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Just as it did earlier with beef and pork, China is now a powerful, decisive player in the world poultry trade: Smiling fortune on those on does business with and creating difficulties for those it does not buy from.
Those who could take advantage of booming Chinese poultry demand benefitted – and none did so more than Thailand. China offset falling EU shipments, making for a nominal 1.3% increase in 2020 exports to 911,000 tonnes, from a Thai Customs estimated 900,000 tonnes last year.
Even as its tourism-dependent domestic chicken consumption nosedived, Thai exports to China in the first three quarters of 2020 were up 70% by volume and 75% by value from 2019 levels.
Moreover, export-driven Thai chicken is making a home for itself in China's market: From just six plants in the mid-2010s, 14 plants were approved for export to China in 2019, 23 in 2020, and approximately 35 by some time in 2021. Kukrit Areepakorn, manager at the Thai Broiler Processing Exporters Association, estimates total 2020 exports to China at 135,000 tonnes, more than double 2019's volume.
On one hand, with the EU suffering the deepest recession of any part of the world, Thai processed chicken exports once bound for the west were diverted to Asia. H1 exports to Britain and the EU fell 17%, to 151,000 tonnes, compared to 182,000 tonnes a year earlier. Fortunately, with H1 2020 exports to Japan rising 5%, the overall January through June decline in cooked Thai chicken exports was limited to 6%.
On the other hand, while Thailand relies heavily on value-added cooked chicken, China mostly demands raw, unprocessed poultry meat. Forced to adapt, H1 2020 saw Thai output of unprocessed chicken meat rise by 3% on-year while cooked chicken output fell by 2.5% to 3.0% over this same time. Growing shipment volumes to China and Japan are expected to see exports resume growth in H2, making for a nominal rise of 1% in 2020 exports (to 910,000 tonnes) over 2019 levels.
With exports holding steady and H2 2020 consumption rebounding sharply, 2020 Thai broiler meat production will fall by only 1.5%, from 3.30 million tonnes in 2019 to 3.25 million in 2020 – This is considerably better than the 2.90 million tonne output that was projected just six months ago.
Going forward, 2021 sees a recovery in domestic Thai chicken consumption, aggressive growth in China-bound exports, and flat trade elsewhere boosting output up 4.6% to a record 3.4 million tonnes and exports 5% to 955,000 tonnes.
Should the world economy recover and no further supply/demand shocks occur, Thailand should produce nearly 3.6 million tonnes of chicken and enjoy over a million tonnes of poultry meat exports in 2022.
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