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China prepares for a productive year in poultry

In 2022, chicken meat production in China is forecast to exceed 2021 as prices rebound, demand boosts national consumption, and new facilities expand production capacity.

Meanwhile, total imports of chicken meat to China are forecast to increase by 3% while exports are expected to grow by 4% next year.

In 2022, domestic demand for chicken meat is expected to support Chinese imports. Photo: Ehimetalor Akhere Unuabona
In 2022, domestic demand for chicken meat is expected to support Chinese imports. Photo: Ehimetalor Akhere Unuabona

In 2021, the price of pork declined and many Chinese consumers switched from chicken to pork. Low chicken prices coupled with high feed costs and weak consumer demand squeezed profit margins for small and medium sized producers. It is expected that in 2022, large producers that withstood 2021 profit losses are forecast to absorb much of the market share lost by the smaller producers in 2021.

Poultry rebounds in 2022

In the last few years, multiple companies have publicised plans to develop breeding farms, and in 2022, chicken meat production is forecast to exceed 2021 as prices rebound, demand boosts national consumption, and new facilities expand production capacity. It is anticipated that prior investments, new facilities and new players in chicken production will increase capacity and expand broiler chick production.

A 20% increase in production capacity

Industry sources indicated that in the first half of 2021, China imported over 500,000 grandparent stock to increase commercial stocks, and vertically integrated facilities, scheduled to come online in 2022, are estimated to increase production capacity by 20%. Most of these projects have been led by established producers with a production capacity of 100 million broilers or more per facility per year.

Chicken competitively priced

In 2022, consumer demand for chicken meat is forecast to grow as chicken becomes more competitively priced to pork. The food service sector and “healthy eating” trends will also increase demand. In addition, the purchase of pre-cooked or fully-cooked chicken for home consumption, which grew during the Covid-19 pandemic, has remained post pandemic.

Processed chicken sector expanding

In China, processed chicken meat accounts for nearly 15% of total chicken consumption. This category expanded during the Covid-19 pandemic as food service and retail sectors adjusted to consumer demand for quick and convenient home delivery.

Currently, 3 categories dominate China’s processed chicken products:
- Pre-cooked, seasoned with sauces or spices.
- Preserved or aged products (such as sausages).
- Heated such as fried, roasted, or pre-cut salad products.
The pre-cooked seasoned chicken category occupies more than 70% of total processed chicken, while the other 2 occupy the remaining 30%.

”...domestic chicken prices are forecast to rise, international shipping and port disruptions to improve, and demand for chicken meat to support strong.”

Active poultry trade

In 2022, domestic chicken prices are forecast to rise, international shipping and port disruptions to improve, and demand for chicken meat to support strong Chinese imports. Hence, chicken meat imports are forecast to increase by 3% in 2022 to 930,000 mt. Imports in 2021 are forecast to decline from exceptionally high levels in 2020 due to international shipping disruptions and lower domestic chicken prices. It is reported that even with declines in domestic chicken meat prices, the price of chicken meat imports is between 20 to 50% lower than that of domestic chicken meat.

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Exports to Japan and Hong Kong

In 2022, Chinese exports of chicken meat products are forecast to grow by 4% to 440,000 mt. China’s chicken meat exports to Japan and Hong Kong, the first and second largest export markets, respectively, are anticipated to improve as the food service sectors are expected to return to pre-Covid-19 levels. China primarily exports processed chicken meat products to Japan and chilled chicken meat products to Hong Kong.

The information in this article has been extracted from a USDA GAINS report.