China’s chicken producers are pushing ahead with aggressive expansion plans despite a slump in demand due to the coronavirus, reducing reliance on imports amid recent fears about the safety of foreign meat.
The world’s No 2 poultry producer is expected to produce a record 14.85 million tonnes of chicken meat in 2020, according to the United States Department of Agriculture, a substantial increase over last year’s 18 per cent rise to 13.75 million tonnes.
The significant expansion is boosting demand for key feed grains like corn and soybeans, traders in China say, while pushing down poultry prices.
It could also mean smaller purchases of imported frozen chicken just as consumer confidence in imported food takes a hit. Last week, chicken wings from Brazil tested positive for the coronavirus.
“Currently the price is so low. I don’t think it’s just weak demand but it’s also the sufficient supply,” said Pan Chenjun, senior analyst at Rabobank.
China slaughtered 9.3 billion chickens last year, including 4.4 billion white-feathered broilers, favoured by fast-food chains for cheap, plump meat.
Industry leaders like Liaoning Wellhope Agri-Tech, Yum China KFC-supplier Fujian Sunner Development and Thailand’s CP already had expansion plans to meet Beijing’s goal for more integrated food production.
But some accelerated those projects after profits soared last year alongside the plunge in pork output. With consumers and restaurants seeking substitutes, chicken prices hit record highs.